DXP Enterprises Inc (DXPE) 2023 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. Finally, I would like to welcome everyone to the DXP Enterprises 2023 Fourth Quarter and Fiscal Year 2023 Results Conference Call. All lines have been placed on mute to prevent any background noise.

女士們先生們，謝謝你們的支持。我叫 Desiree，今天我將擔任你們的會議操作員。最後，我歡迎大家參加 DXP Enterprises 2023 年第四季和 2023 財年業績電話會議。所有線路均已靜音，以防止任何背景噪音。

After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to reserve your question again, press star one. I would now like to turn the conference over to Kent, the Chief Financial Officer. Please go.

演講者發言後，將進行問答環節。如果您想在此期間提出問題，只需按電話鍵盤上的星號，然後再按數字 1 即可。如果您想再次保留您的問題，請按星號一。我現在想把會議交給財務長肯特。請離開。

Thank you, Desiree, and thank you, everyone, for joining us today. This is Kent Yee, and welcome to DXP's Q4 2023 conference call to discuss our results for the fourth quarter and fiscal year ending December 31st 2023. Joining me today is our Chairman and CEO, David Little. Before we get started, I want to remind you that today's call is being webcast and recorded and includes forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements.

謝謝你，Desiree，也謝謝大家今天加入我們。我是 Kent Yee，歡迎參加 DXP 2023 年第四季電話會議，討論我們截至 2023 年 12 月 31 日的第四季和財年的業績。今天加入我的是我們的董事長兼執行長 David Little。在我們開始之前，我想提醒您，今天的電話會議正在進行網路直播和錄音，其中包含前瞻性陳述。實際結果可能與這些前瞻性陳述預期的結果有重大差異。

A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis are contained in our SEC filings. However, DXP assumes no obligation to update that information because of new information or future events or during this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our earnings press release. The press release and an accompanying investor presentation are now available on our website at ir.dxpe.com.

我們向 SEC 提交的文件中詳細討論了我們認為可能對我們的業務持續產生重大影響的許多因素。但是，DXP 不承擔因新資訊或未來事件而更新該資訊的義務，或在本次電話會議期間，我們可能會提供 GAAP 和非 GAAP 財務指標。我們的收益新聞稿中包含了 GAAP 與非 GAAP 指標的調整表。該新聞稿和隨附的投資者簡報現已在我們的網站 ir.dxpe.com 上提供。

I will now turn the call over to David Little, our Chairman and CEO to provide his thoughts and a summary of the fourth quarter and fiscal 2023 performance and financial results.

我現在將把電話轉給我們的董事長兼執行長 David Little，他將提供他的想法以及第四季度和 2023 財年業績和財務業績的摘要。

Thanks, Kent, and thanks to everyone on our 2023 fourth-quarter and fiscal 2023 conference call. I am pleased to report record full year results for our key financial metrics, sales, sales per day, gross profit margins and adjusted EBITDA margins. These results demonstrate the power of our DX people, products processes to serve the needs of our customer. They also highlight the benefit of our broad and diverse exposure to different end markets and regions and our disciplined capital allocation strategy. It is my privilege to share DXP's fourth quarter and physical 2023 results with you on behalf of over 2,837 DX people. Congratulations to all our stakeholders and a special thanks to our DX people.

謝謝 Kent，也感謝參與 2023 年第四季和 2023 財年電話會議的所有人。我很高興地報告我們的關鍵財務指標、銷售額、每日銷售額、毛利率和調整後 EBITDA 利潤率創下了創紀錄的全年業績。這些結果證明了我們的 DX 人員和產品流程滿足客戶需求的能力。它們還強調了我們對不同終端市場和地區的廣泛和多樣化的投資以及我們嚴格的資本配置策略的好處。我很榮幸能代表超過 2,837 名 DX 人員與您分享 DXP 第四季和 2023 年實際業績。恭喜我們所有的利害關係人，並特別感謝我們的 DX 人員。

You can trust physical 2023 was another successful year for DXP growing sales, 13.4% to $1.7 billion. We are excited to move into fiscal 2024 with the momentum and results of 2023. One of our key long-term themes themes winning at max margins converted into improving gross profit margins by 160 basis points to 30.1%. We are transitioning our theme and to 2024 from winning at max margins to winning at max margins while maximizing operating efficiencies.

您可以相信，實體 2023 年是 DXP 銷售額成長的另一個成功的一年，成長了 13.4%，達到 17 億美元。我們很高興以 2023 年的勢頭和成果進入 2024 財年。我們的關鍵長期主題之一是以最大利潤取勝，這轉化為毛利率提高了 160 個基點，達到 30.1%。我們正在將我們的主題從“以最大利潤取勝”轉變為“以最大利潤取勝，同時最大限度地提高營運效率”，到 2024 年。

And it is an investment fiscal year 2023 was a record year in terms of sales dollars, achieving a new high sales watermark for DXP, while also achieving the physical year of 10% plus adjusted EBITDA margins, we executed on our constant goal of 10% plus sales growth and 10% EBITDA margins. And we will look to maintain that as we enter into fiscal 2024 and thus focusing on driving operating efficiencies while still growing the business. We continue to successfully execute on our end market goals of diversification and scale.

就銷售金額而言，2023 財年是投資創紀錄的一年，實現了DXP 的新高銷售水位，同時還實現了10% 的實際年度加上調整後的EBITDA 利潤率，我們執行了10% 的不變目標加上銷售額成長和 10% 的 EBITDA 利潤率。當我們進入 2024 財年時，我們將繼續保持這一點，從而在業務成長的同時專注於提高營運效率。我們繼續成功執行多元化和規模化的終端市場目標。

At the end of physical 2023, energy was 25% of our business followed by chemical at 10% and with water and wastewater and food and beverage at 7% each and manufacturing and general industry at 8% and 12% respectively. In other words, DXP has continued to deliver on balancing our risk from an end market perspective, and we see that in our fiscal 2023 results. And we look forward to the interplay of these markets in 2024.

截至 2023 年年底，能源占我們業務的 25%，其次是化學品，佔 10%，水和廢水、食品和飲料各佔 7%，製造業和一般工業分別佔 8% 和 12%。換句話說，DXP 繼續從終端市場的角度平衡我們的風險，我們在 2023 財年業績中看到了這一點。我們期待 2024 年這些市場的互動。

Dxp's sales and operational professionals for teaming up together and winning for our customer and stakeholders. Thank you to our corporate support team for their efforts to support both internal and external customers.

Dxp 的銷售和營運專業人員齊心協力，為我們的客戶和利害關係人贏得勝利。感謝我們的企業支援團隊為支持內部和外部客戶所做的努力。

And thank you, DXP, for an awesome year. Our future looks bright. In fiscal 2023. I mentioned, we contain We continue to soundly execute on diversifying end markets with a focus on water and wastewater and other industrial markets.

感謝 DXP，讓我們度過了美好的一年。我們的未來看起來一片光明。2023 財年。我提到，我們將繼續穩健地執行終端市場多元化，並專注於水和廢水以及其他工業市場。

We also continue to execute on acquisitions, adding three great companies during the year, including Florida, valve board and and alliance pump and mechanical, also executing on our share repurchase repurchase program and refinancing our debt in the second half of 2023, cleaning up our capital structure and positioning DXP for organic and inorganic growth in 2024.

我們也繼續執行收購，年內增加了三家偉大的公司，包括Florida、Valve Board 和Alliance Pump and Mechanical，同時也執行我們的股票回購計劃，並在2023 年下半年為我們的債務進行再融資，清理我們的債務。資本結構和 DXP 定位，以實現 2024 年有機和無機增長。

We continue to be excited about the future and delivering a differentiated customer experience, creating an engaging winning culture for DXP and investing in our business to strengthen our core capabilities and drive long-term growth.

我們繼續對未來感到興奮，並提供差異化的客戶體驗，為 DXP 創造引人入勝的文化，並投資我們的業務以增強我們的核心能力並推動長期成長。

For physical 2023, DXP's sales were 13.4% and operating income was up 41.9% compared to 2022 fiscal year 2023, and adjusted EBITDA were 1.6 billion and 174 million, respectively, with adjusted EBITDA margins of 10.38%. Our strategy has always been to combine the financial strength, talent, resources, technology and capabilities of a large company with the fast flexible entrepreneurial capabilities of our local business to deliver superior value to our customers and our suppliers while providing better growth opportunities for our DX people.

2023年實際，DXP的銷售額較2022財年成長13.4%，營業收入成長41.9%，調整後的EBITDA分別為16億及1.74億，調整後的EBITDA利潤率為10.38%。我們的策略始終是將大公司的財務實力、人才、資源、技術和能力與本地業務快速且靈活的創業能力相結合，為我們的客戶和供應商提供卓越的價值，同時為我們的DX 提供更好的成長機會人們。

We continue to believe in this approach and look to renew our commitment to people, processes and resources and technology as we scale DXP and remain focused on doubling the size of our business over the next three to five years, while making strategic investments that match the evolution of DXP from a sales per day standpoint, DXP experience continued improvement throughout the year with Q1 averaging six points six to nine.

我們繼續相信這種方法，並在擴展DXP 時重申我們對人員、流程、資源和技術的承諾，並繼續專注於在未來三到五年內將我們的業務規模擴大一倍，同時進行與我們的策略相符的策略性投資。DXP 的演變 從每日銷售額的角度來看，DXP 的體驗全年持續改善，第一季平均為 6 分至 9 分。

And gentlemen, this is the operator. We are currently having technical difficulties. Your call will resume shortly Until that time your lines will be placed on music hold.

先生們，這是接線生。我們目前遇到技術困難。您的通話將很快恢復，在此之前您的線路將處於音樂保持狀態。

Thank you for patients, gentlemen, this is the operator we are currently having.

謝謝各位患者，先生們，這就是我們目前擁有的接線生。

Ladies and gentlemen, I would now like to turn the conference over to Kent Yee, Chief Financial Officer. Please go ahead.

女士們、先生們，我現在將會議交給財務長 Kent Yee。請繼續。

Thank you. Desiree, David will just hand it back to you to pick up where you left off.

謝謝。Desiree，David 會將其交還給您，讓您從上次停下的地方繼續。

Okay.

好的。

Total DXP sales for Q4 were $407 million or $6.673 million per business day. Our profits for the quarter were positively impacted by a sequential increase in gross profit margins as well as an increase in SG&A expense associated with continued investment in our business. However, in the midst of contained change in growth, our year over year earnings showed improvement and resiliency as we grew diluted earnings per share to 3.89.

第四季 DXP 總銷售額為 4.07 億美元，即每個工作日 667.3 萬美元。我們本季的利潤受到毛利率連續增長以及與我們業務的持續投資相關的銷售、管理和行政費用增加的積極影響。然而，在成長受到遏制的變化中，我們的同比盈利顯示出改善和彈性，稀釋每股收益增長至 3.89。

Sir, again, thank you to the 2,837 DX people for your hard work and dedication and finishing the year as it's as strong as possible. It is always my pleasure to share our fourth quarter and year financial results on their behalf in terms of cash flow and liquidity.

先生，再次感謝 2,837 名 DX 員工的辛勤工作和奉獻精神，並以盡可能強勁的成績結束了這一年。我總是很高興代表他們分享我們第四季和年度的現金流和流動性財務表現。

We generated $94 million of free cash flow in fiscal 2023, which reflects DXP's focus on generating consistent cash flow on investing and the related working capital as the business continues to grow. This, combined with the flexible capital structure, put us in a position where we could keep executing on our acquisition strategy as well as returning capital to our shareholders via via opportunistic share repurchase.

我們在 2023 財年產生了 9,400 萬美元的自由現金流，這反映出 DXP 專注於隨著業務的持續成長，在投資和相關營運資金上產生持續的現金流。這與靈活的資本結構相結合，使我們能夠繼續執行收購策略，並透過機會性股票回購向股東返還資本。

As we have discussed, acquisitions have continued diversify our end market exposure and position us well through some through various economic cycles, and we are excited about 2024 and the growth we are pushing to see both organically and through organic acquisitions as we continue to have a strong pipeline of opportunities. We're excited to have three new companies join us during the year of 2023 on top of the four we completed during 2020 to Florida valve and equipment brought and and alliance pump and mechanical have been great additions to the DXP family through all of our recent acquisitions. Welcome to DXP.

正如我們所討論的，收購繼續使我們的終端市場敞口多元化，並使我們在不同的經濟週期中處於有利地位，我們對2024 年以及我們正在推動的有機成長和透過有機收購看到的成長感到興奮，因為我們繼續擁有強大的機會管道。我們很高興在2020 年完成了四家公司向佛羅裡達州引進閥門和設備的基礎上，在2023 年又有三家新公司加入我們，並且透過我們最近的所有合作，聯盟泵和機械已成為DXP 系列的重要成員。收購。歡迎來到 DXP。

We are excited to have you and it is a it is great having you as a part of DXP, the X. people have continued to find ways to deliver financial results and position us well for all our stakeholders in the face of extraordinary challenges. This is evidenced by our sales growth, improved gross profit margins, acquisitions and the overall teamwork of the DX people. We continue to build our capabilities to provide complementary set of products and services in all our markets, which makes DXP very unique in our industry and gives us more ways to help our customers win we also are consistently looking at reviewing opportunities where we can grow market share.

我們很高興您能加入，並且非常高興您能成為 DXP 的一員，X. 人不斷尋找實現財務業績的方法，並在面對非凡挑戰時為所有利益相關者做好準備。我們的銷售成長、毛利率提高、收購以及 DX 人員的整體團隊合作都證明了這一點。我們不斷增強能力，在所有市場提供互補的產品和服務，這使得DXP 在我們的行業中非常獨特，並為我們提供了更多方法來幫助我們的客戶獲勝，我們也一直在尋找可以擴大市場的機會分享。

We continue our strategy with a relentless drive for progress that includes business and operational initiatives, which we believe will allow us to steadily improve our performance for all of our stakeholders as we go into 2024, we are excited about the opportunity ahead and the potential DXP has to continue to scale and grow within existing and new markets. Total DXP sales and physical 2023 were up 13.4% with service centers leading the way at $1.1 billion, followed by Innovative Pumping Solutions at $273 million, and then supply chain services at 260 million in terms of service centers.

我們繼續堅定不移地推動我們的策略，包括業務和營運計劃，我們相信這將使我們能夠在進入2024 年時為所有利益相關者穩步提高我們的績效，我們對未來的機會和潛在的DXP 感到興奮必須在現有市場和新市場中繼續擴大規模和成長。2023 年DXP 總銷售額和實際銷售額增長了13.4%，其中服務中心以11 億美元的銷售額領先，其次是創新泵送解決方案，銷售額為2.73 億美元，然後是供應鏈服務，服務中心銷售額為2.6 億美元。

The diversity of end markets and our MRO nature within Service Centers allows us to continue to remain res. zillion and continue to experience consistent top line year-over-year growth from a regional perspective, the majority of our regions continue to experience year over year growth, including the North Rockies, Alaska, Texas, Gulf Coast and South Central. Additionally, we continue to see strength in our air compressor product division, and we continue to expect that our end markets will remain constructive over the near future for that to be energy as it pertains to energy skinny.

終端市場的多樣性和我們服務中心的 MRO 性質使我們能夠繼續保持資源優勢。從區域角度來看，我們的大多數地區繼續實現同比增長，包括北落基山脈、阿拉斯加、德克薩斯州、墨西哥灣沿岸和中南部。此外，我們繼續看到我們的空氣壓縮機產品部門的實力，並且我們繼續預計我們的終端市場在不久的將來將保持建設性，因為它涉及能源匱乏。

We believe that we could be in the early stages of an upcycle supported by energy transition, which has been consistent with our recent commentary over the last three quarters in terms of IPS, our Innovative Pumping Solutions, our Q4 average IPS backlog continues to stay ahead of the physical 2022 average. Additionally, our year to date average continues exceed our long-term averages. Rps backlog going back to 2015, which we highlighted Accuray occurred for the first time in the second quarter and continue as we move into 2024 what this indicates is that we are continuing to increase our bookings. And we mentioned or as we mentioned earlier, we're likely in the front end of a good cycle on the energy related project work that we look forward to as we move into 2024.

我們相信，我們可能處於能源轉型支援的升級週期的早期階段，這與我們最近三個季度在 IPS 方面的評論是一致的，我們的創新泵送解決方案，我們第四季度平均 IPS 積壓繼續保持領先2022 年實際平均值。此外，我們今年迄今為止的平均水平繼續超過我們的長期平均水平。Rps 積壓可以追溯到 2015 年，我們強調 Accuray 在第二季度首次出現這種情況，並在進入 2024 年時繼續增加，這表明我們正在繼續增加預訂。我們提到過，或者正如我們之前提到的，我們很可能正處於能源相關專案工作良好週期的前端，我們期待進入 2024 年。

As we maintain growth, our main focus within IPS will be managing to the demand level we have finding opportunities in all markets such as energy, biofuels, food and beverage and water and wastewater and pricing appropriately given the supply chain dynamics and the ebbs and flow of inflation. Supply Chain Services experienced an increase year over year, primarily due to new customers that we added this year. Our customer end markets contributing to SCSCS. and 2023 included energy, medical technology and food and beverage.

隨著我們保持成長，我們在IPS 內的主要重點將是管理需求水平，我們在能源、生物燃料、食品和飲料、水和廢水等所有市場中尋找機會，並根據供應鏈動態和潮起潮落適當定價通貨膨脹。供應鏈服務年增，主要是由於我們今年增加了新客戶。我們的客戶端市場為 SCSCS 做出了貢獻。 2023 年包括能源、醫療技術以及食品和飲料。

That said, demand for SES's services and increase is increasing because of proven technology and efficiencies that they perform for all their customers, but the sales cycle can be protracted. And we look to our SCS leaders to add new customers as we move into 2024.

也就是說，由於 SES 為所有客戶提供的成熟技術和效率，對 SES 服務的需求和成長正在增加，但銷售週期可能會延長。我們期待 SCS 領導者在進入 2024 年時增加新客戶。

Dxp's overall gross profit margins for the year were 30.1%, a 160 basis point improvement over 2022. We displayed consistent gross margin performance within our different segments throughout the year and added accretive gross profit margins through acquisitions.

Dxp 全年整體毛利率為 30.1%，比 2022 年提高 160 個基點。全年不同細分市場的毛利率表現保持一致，並透過收購增加了毛利率。

As said, service centers and IPS had meaningful improved gross profit margins year over year. Overall, DXP produced adjusted EBITDA of $174.3 million or an increase of 32.4% year over year. Adjusted EBITDA as a percent of sales was 10.38% or an increase of 182 basis points compared to 2022.

如前所述，服務中心和 IPS 的毛利率逐年顯著提高。總體而言，DXP 調整後 EBITDA 為 1.743 億美元，年增 32.4%。調整後 EBITDA 佔銷售額的百分比為 10.38%，與 2022 年相比增加了 182 個基點。

In summary, we are pleased with our overall performance in 2023. We look to continue to drive improvement in our organic sales and marketing strategies, drive further sales growth through acquisitions and anticipate fiscal 2024 to be a year focused on maintaining margins while driving and laying the ground for groundwork for long-term operating efficiencies.

總而言之，我們對 2023 年的整體表現感到滿意。我們希望繼續推動有機銷售和行銷策略的改進，透過收購進一步推動銷售成長，並預計 2024 財年將是專注於維持利潤率的一年，同時推動並為長期營運效率奠定基礎。

Overall, though, through our strategic investments and initiatives, we will remain focused on providing world-class tools, processes, training technology to deliver value to our customers and suppliers and to help our DXP people be more productive so that they can better help our customers win.

但總體而言，透過我們的策略性投資和舉措，我們將繼續專注於提供世界一流的工具、流程和培訓技術，為我們的客戶和供應商創造價值，並幫助我們的DXP 員工提高工作效率，以便他們能夠更好地幫助我們客戶獲勝。

I would like to sincerely thank all of our DXP people who contains to show show up to work with their passion, commitment, teamwork and selfless service. We have a tremendous team and it is an honor to deliver value for all our stakeholders. I am pleased by our performance in fiscal 2023. I am proud of our efforts to continue to improve.

我衷心感謝所有 DXP 員工，他們以熱情、奉獻、團隊合作和無私的服務來工作。我們擁有一支優秀的團隊，很榮幸能為所有利害關係人創造價值。我對我們 2023 財年的表現感到滿意。我為我們持續改進的努力感到自豪。

We are working well. We are growing sales in excess of the market and expect and in the near future, we expect to drive strong SG&A leverage, manage working capital and generate free cash flow if organic growth slows then free cash flow will grow and we will take advantage of the economy to grow profitably, both organically and through acquisitions.

我們工作得很好。我們的銷售額成長超過市場，預計在不久的將來，我們預計將推動強勁的銷售及管理費用槓桿，管理營運資金並產生自由現金流，如果有機成長放緩，那麼自由現金流將會成長，我們將利用經濟透過有機成長和收購實現獲利成長。

We have grown sales on a compounded annual growth rate of over 7% since 1920 19. And we have achieved new highs in both sales and profitability. And I would like to thank all our stakeholders and especially our DX. people.

自 1920 年以來，我們的銷售額年複合成長率超過 7% 19。我們的銷售額和獲利能力都創下了新高。我要感謝我們所有的利害關係人，特別是我們的 DX。人們。

But with that, I will now turn it back to Kent to review the financials in more detail.

但現在，我將把它轉回肯特，以更詳細地審查財務狀況。

Thank you, David, and thank you to everyone for joining us for our Fourth Quarter and Fiscal Year 2020 Financial Results. Fiscal 2023 was a record year, a new watermark in terms of sales and gross margins.

謝謝 David，也謝謝大家與我們一起分享 2020 年第四季和財年的財務表現。2023 財年是創紀錄的一年，在銷售額和毛利率方面創下了新的水位。

Additionally, it is our first fiscal year of 10% plus adjusted EBITDA margins. We are excited to report these results and we look forward to moving into fiscal year 2020. Specifically fiscal year 2023 financial performance reflects our ability to continue to execute on key themes that we have been focused on over the past three to five years.

此外，這是我們第一個財年實現 10% 的調整後 EBITDA 利潤率。我們很高興報告這些結果，並期待進入 2020 財年。具體而言，2023 財年的財務表現反映了我們繼續執行過去三到五年來重點關注的關鍵主題的能力。

Overall, DXP's fiscal 2023 financial results were great to see and reflect the following strong year-over-year sales growth driven by service centers and Innovative Pumping Solutions on lessening impacts from inflation and price increases compared to a year ago. Continued gross margin strength and stability continued year over year and sequential growth in IPS, energy and water related backlog and activity, consistent operating leverage, leading to sustained adjusted EBITDA margins, continued execution on our acquisition strategy, completing three acquisitions and reaching the early stages of scale within water and wastewater and significant capital return to shareholders through our share repurchase program, a great high watermark year and one that will position us well for 2024 and beyond.

總體而言，DXP 的2023 財年財務業績令人欣喜，並反映出在服務中心和創新泵送解決方案的推動下，同比銷售強勁增長，與一年前相比，通貨膨脹和價格上漲的影響有所減輕。毛利率持續強勁且穩定，IPS、能源和水相關的積壓訂單和活動連續增長，運營槓桿保持持續調整，EBITDA 利潤率持續調整，繼續執行我們的收購戰略，完成三項收購併進入早期階段水和廢水處理領域的規模擴大，並透過我們的股票回購計畫為股東帶來顯著的資本回報，這是一個偉大的高水位年份，將使我們在2024 年及以後保持良好的地位。

Total sales for the fourth quarter increased 0.2% year over year to $407 million. That said, this reflects improvement in sales per business day going from $6.655 million in Q three with 63 business days to 61 days in Q4 or $6.673 million sales per business day acquisitions that had been with DXP for less than a year contributed $2.8 million in sales during the quarter.

第四季總銷售額年增 0.2%，達到 4.07 億美元。也就是說，這反映了每個工作日銷售額的改善，從第三季63 個工作日的665.5 萬美元增加到第四季度的61 天，即每個工作日銷售額667.3 萬美元，與DXP合作不到一年的收購貢獻了280 萬美元的銷售額本季期間。

Total sales for DXP for fiscal 2023 were $1.7 billion, increasing 13.4% compared to fiscal 2022. For the full year, acquisitions contributed $33.1 million in sales. Average daily sales for the fourth quarter were $6.67 million per day, as previously mentioned, are close to flat to Q3 2023 and were up 1.8% versus Q4 2022. For our sales per business day of $6.55 million in Q4 2022. Average daily sales for the fiscal year 2023 were $6.6 million per day versus $5.85 million per day in fiscal 2022.

2023 財年 DXP 的總銷售額為 17 億美元，比 2022 財年成長 13.4%。全年收購貢獻了 3,310 萬美元的銷售額。如前所述，第四季的日均銷售額為 667 萬美元，與 2023 年第三季基本持平，與 2022 年第四季相比成長 1.8%。2022 年第四季我們每個工作日的銷售額為 655 萬美元。2023 財年的日均銷售額為 660 萬美元，而 2022 財年的日均銷售額為 585 萬美元。

In terms of our business segments, Innovative Pumping Solutions grew 18.2% year over year. This was followed by service centers growing 13.5% year over year. And supply chain services growing 8.3% year over year.

就我們的業務板塊而言，創新泵送解決方案年增18.2%。其次是服務中心，年增 13.5%。供應鏈服務較去年同期成長8.3%。

In terms of our service centers, Regions within our Service Center business, segment, which experienced notable sales growth year over year include the North Rockies, Alaska, Texas, Gulf Coast and South Central key products and end markets continue to drive sales performance include air compressors, rotating equipment, water and wastewater, chemical, general industrial, food and beverage, transportation and energy.

就我們的服務中心而言，我們的服務中心業務細分市場中銷售同比顯著增長的地區包括北落基山脈、阿拉斯加、德克薩斯州、墨西哥灣沿岸和中南部，主要產品和終端市場繼續推動銷售業績，包括空氣壓縮機、旋轉設備、水和廢水、化學、一般工業、食品和飲料、運輸和能源。

Supply Chain Services performance continues to reflect the impact of the addition of new customers and specifically a large diversified chemical customer that we added in Q2 of last year and has fully ramped as of Q2, Q2 of 2023.

供應鏈服務業績持續反映了新客戶增加的影響，特別是我們在去年第二季增加的大型多元化化學品客戶，截至 2023 年第二季已全面提升。

That said, while supply chain service experienced a decline year over year in Q3 and Q4. This is primarily due to some facility closures with existing customers as well as the Streamline inefficiencies. We brought to new customers that we added this year for fiscal 2023, Supply Chain Services grew 8.3%. And as we move into fiscal 2024, we will look for new customer additions.

儘管如此，供應鏈服務在第三季和第四季同比有所下降。這主要是由於現有客戶的一些設施關閉以及 Streamline 效率低下所致。我們為 2023 財年增加了今年新增的客戶，供應鏈服務成長了 8.3%。隨著進入 2024 財年，我們將尋找新客戶。

In terms of Innovative Pumping Solutions, we continue to experience increases in the energy and water related backlog. Our Q4 energy related average backlog grew 5.2% over our Q3 average backlog, which continues to be a notable uptick uptick excuse me, compared to Q1 of this year and continues to be ahead of our 2015, 2016 and 2017 average backlog.

在創新泵送解決方案方面，我們的能源和水相關積壓訂單持續增加。我們第四季能源相關的平均積壓訂單比第三季平均積壓訂單成長了5.2%，對不起，與今年第一季相比，這仍然是一個顯著的上升趨勢，並且繼續領先於我們2015 年、 2016 年和2017 年的平均積壓訂單。

The conclusion continues to remain that we are trending meaningfully above 2016 and 2017 sales levels, and we are moving towards 2015 levels based upon where our backlog stands today, we have been experiencing strong organic sales growth within IPS. We experienced that in Q4 of 2023 and expect that trend to continue into 2024. In terms of our DXP water backlog, as of Q4, we are up 37 plus percent compared to the industry.

結論仍然是，我們的銷售趨勢明顯高於 2016 年和 2017 年的銷售水平，並且根據我們今天的積壓情況，我們正在向 2015 年的水平邁進，我們在 IPS 內經歷了強勁的有機銷售增長。我們在 2023 年第四季經歷了這種情況，並預計這種趨勢將持續到 2024 年。就我們的 DXP 水積壓而言，截至第四季度，我們比業界成長了 37% 以上。

Turning to our gross margins, DXP's total gross margins were 30.1%, a 160 basis point improvement over fiscal 2022. This improvement was driven by strength in our IPS business segment, showing the greatest improvement with margins improving 349 basis points on a year-over-year comparative basis.

談到毛利率，DXP 的總毛利率為 30.1%，比 2022 財年提高了 160 個基點。這項改善是由我們的 IPS 業務部門的實力推動的，顯示出最大的改善，利潤率比去年同期提高了 349 個基點。

This was followed by a 146 basis point improvement from service centers that said from a segment mix, sales contribution, service centers contributed 68.2%, Innovative Pumping Solutions 16.3%, and supply chain services contributing 15.5% compared to last year. Ses's mix contribution was higher at 16.2%, which impacted gross margins slightly in fiscal 2022.

其次是服務中心提高了146 個基點，從細分市場結構來看，與去年相比，銷售貢獻中，服務中心貢獻了68.2%，創新泵送解決方案貢獻了16.3%，供應鏈服務貢獻了15.5 %。Ses 的混合貢獻較高，達到 16.2%，對 2022 財年的毛利率略有影響。

In terms of operating income combined, all three business segments increased 174 basis points in year-over-year business segment operating income margins for $16.3 million versus fiscal 2022. This was driven by improvements in operating income margins across all three business segments. Ips operating income margins improved 324 basis points, driven by the addition of water and wastewater acquisitions and overall improvement within the energy related IPS business.

就營業收入合計而言，與 2022 財年相比，所有三個業務部門的營業利潤率年增 174 個基點，達到 1,630 萬美元。這是由於所有三個業務部門營業利潤率的改善所推動的。由於水和廢水收購的增加以及能源相關 IPS 業務的整體改善，IPS 營運利潤率提高了 324 個基點。

Service center operating income margins improved 170 basis points on a comparative basis and year-over-year operating income margins, Supply Chain Services operating income margins improved 14 basis points on a year-over-year comparative basis. The improvement in service center reflects the impact of acquisitions at a higher relative operating income margin. Total DXP operating income increased 166 basis points versus fiscal 2022 to $138.7 million.

服務中心營業利益率年增 170 個基點，供應鏈服務營業利益率較去年成長 14 個基點。服務中心的改善反映了收購對較高相對營業利潤率的影響。DXP 總營業收入較 2022 財年成長 166 個基點，達到 1.387 億美元。

Our SG&A for the full year increased $42.3 million to $366.6 million increase reflects the growth in the business and associated incentive compensation as well as DXP investing in its people through merit pay raises as well as the addition of new personnel. Sg&a as a percent of sales decreased slightly to 21.84% versus 21.9% of sales in fiscal 2022. We still anticipate that DXP will benefit from the leverage inherent in the business despite increased operating dollars supporting our growth and the impacts of acquisitions.

我們全年的 SG&A 增加了 4,230 萬美元，達到 3.666 億美元，成長反映了業務和相關激勵薪酬的成長，以及 DXP 透過提高績效工資和增加新人員對其員工進行的投資。SG&A 佔銷售額的百分比略有下降，降至 21.84%，而 2022 財年佔銷售額的 21.9%。儘管營運資金增加支持我們的成長和收購的影響，但我們仍然預期 DXP 將受益於業務固有的槓桿作用。

Turning to EBITDA, fiscal 2023 adjusted EBITDA was $174.3 million. Adjusted EBITDA margins were 10.4%. This is our first fiscal year with adjusted EBIT adjusted EBITDA margins in excess of 10%, and we will look for this to continue year over year.

至於 EBITDA，2023 財政年度調整後的 EBITDA 為 1.743 億美元。調整後 EBITDA 利潤率為 10.4%。這是我們第一個調整後 EBIT 調整後 EBITDA 利潤率超過 10% 的財年，我們希望這種情況能逐年持續下去。

Adjusted EBITDA margins increased 182 basis points or $47.5 million. This reflects the fixed cost SG&A leverage we experienced as we grow sales. This translated into 2.8 times operating leverage in terms of our EPS, our net income for fiscal 2023 was $68.8 million. Our earnings per diluted share for fiscal 2023 was $3.89 per share versus $2.47 per share last year.

調整後 EBITDA 利潤率增加 182 個基點，即 4,750 萬美元。這反映了我們在銷售成長時所經歷的固定成本、銷售及管理費用槓桿。這相當於我們每股盈餘的 2.8 倍營運槓桿，我們 2023 財年的淨利為 6,880 萬美元。我們 2023 財年的攤薄每股收益為每股 3.89 美元，去年為每股 2.47 美元。

Adjusting for one-time or noncash items associated with our $550 million refinancing during Q4 and other items. Our earnings per diluted share for fiscal 2023 was $4.9 per share. Our adjusted diluted EPS in Q4 was $1.12 per share normalizing our effective tax rate for the Q4 pickup through throughout 2023, diluted EPS would have been $0.69 per share for the fourth quarter.

調整與我們在第四季的 5.5 億美元再融資相關的一次性或非現金項目以及其他項目。2023 財年我們的攤薄每股收益為每股 4.9 美元。我們在第四季度調整後的稀釋每股收益為每股 1.12 美元，使我們在整個 2023 年第四季度回升的有效稅率正常化，第四季度的稀釋每股收益將為每股 0.69 美元。

Turning to the balance sheet and cash flow.

轉向資產負債表和現金流量。

In terms of working capital, our working capital decreased $7.4 million from December of 2020 to EUR272.1 million as a percentage of sales, this amounted to 16.2%, which is below the 18.9% compared to this time last year.

在營運資金方面，我們的營運資金佔銷售額的比例較 2020 年 12 月減少了 740 萬美元，降至 2.721 億歐元，達到 16.2%，低於去年同期的 18.9%。

At this point, we have moved in line with our historical averages or ranges in terms of investing in working capital. And we have moved up our Q3 2022 a high of 19.9% of LTM sales. We do anticipate further acquisitions. So as we move into fiscal 2024, this could move upwards, albeit we are focused on managing working capital as efficiently as possible as we scale and grow.

目前，我們在營運資本投資方面已與歷史平均或範圍保持一致。我們將 2022 年第三季的 LTM 銷售額提高到了 19.9%。我們確實預計會有進一步的收購。因此，當我們進入 2024 財年時，這一數字可能會上升，儘管我們專注於隨著規模和增長而盡可能有效地管理營運資本。

In terms of cash, we had $173.1 million in cash on the balance sheet as of December 31st, this is an increase of $127.1 million compared to the end of Q4 2022 and an increase of $149.9 million since September. This reflects the refinancing of our existing term loan B in the fourth quarter and the strong cash flow generation we experienced during the fourth quarter, which we will touch upon later in my comments as it pertains to our Term Loan B, as a reminder, during the fourth quarter, we announced that we refinanced repo repriced our Term Loan B, which now has a maturity of October 2030.

就現金而言，截至 12 月 31 日，我們的資產負債表上有現金 1.731 億美元，比 2022 年第四季末增加了 1.271 億美元，自 9 月以來增加了 1.499 億美元。這反映了我們第四季度現有定期貸款B 的再融資以及我們在第四季度經歷的強勁現金流生成，我們將在稍後的評論中談到這一點，因為它與我們的定期貸款B 相關，提醒一下，第四季度，我們宣布對定期貸款 B 進行再融資回購重新定價，該貸款的到期日為 2030 年 10 月。

We successfully repriced the new term loan A. Term Loan B, reducing our borrowing cost by 50 basis points to silver plus for 75 versus oh four plus five 25, while also raising an incremental $125 million in capital to support our acquisition and investments program over the next nine to 12 months.

我們成功地對新定期貸款A 和定期貸款B 進行了重新定價，將我們的借貸成本降低了50 個基點，銀加為75，而四加五為25，同時還籌集了1.25 億美元的增量資本，以支持我們的收購和投資計劃未來 9 至 12 個月。

In terms of CapEx, CapEx for fiscal 2023 was $12.3 million versus $4.9 million in fiscal 2022. This increase reflects reinvestment in some of our facilities and equipment on behalf of our employees. As we move forward, we will continue to invest in the business as we focus on growth and turning to free cash flow. We generated solid operating cash flow during the fourth quarter as we did during the first and third quarter during Q4 of fiscal 2023 we had cash flow from op operations of $42.4 million and 106.2 million, respectively, for fiscal 2023. This translated into $94 million in free cash flow. While we continue to make improvements in our free cash flow when we are growing, DXP tends to make significant investments in inventory and project work throughout the year, and we continue to experience these investments as we did in 2023. But we have put a closer eye on managing this as we move through the cycles.

就資本支出而言，2023 財年的資本支出為 1,230 萬美元，而 2022 財年為 490 萬美元。這一增長反映了我們代表員工對一些設施和設備的再投資。隨著我們的前進，我們將繼續投資於該業務，專注於成長並轉向自由現金流。我們在第四季度產生了穩定的營運現金流，就像我們在2023 財年第四季的第一季和第三季一樣，我們在2023 財年的營運業務現金流分別為4,240 萬美元和1.062億美元。這轉化為 9,400 萬美元的自由現金流。雖然我們在發展過程中不斷改善自由現金流，但 DXP 往往會全年在庫存和專案工作方面進行大量投資，而且我們將像 2023 年一樣繼續經歷這些投資。但隨著週期的推移，我們會更加密切地關注這一點。

Return on invested capital or ROIC for fiscal 2023 was 38% and continues to be above our cost of capital and is reflecting our improved profitability levels and efficient working capital management. And as of December 31st, our fixed charge coverage ratio was 2.69 to one, and our secured leverage ratio was 2.1 to 1 with the covenant EBITDA for fiscal 2023 of $178.4 million. Total debt outstanding on December 31st was $548.6 million.

2023 財年的投資資本報酬率或 ROIC 為 38%，持續高於我們的資本成本，反映了我們獲利水準的提高和高效的營運資本管理。截至 12 月 31 日，我們的固定費用覆蓋率為 2.69 比 1，我們的擔保槓桿率為 2.1 比 1，2023 財年的契約 EBITDA 為 1.784 億美元。截至 12 月 31 日，未償債務總額為 5.486 億美元。

In terms of liquidity, as of December 31, we were undrawn on our ABL with $2.9 million in letters of credit outstanding was $132.1 million of availability and liquidity of 3.5 $0.3 million, including $173.1 million in cash, which some of it has already been used to finance the purchases of Hennessy Cathy and Pro sale, which we closed subsequent to the fourth quarter. We are excited to have them and they will start reporting with us during the first quarter of 2024.

在流動性方面，截至12 月31 日，我們的ABL 未提取金額為290 萬美元，未償還信用證為1.321 億美元，可用流動性為3.5 30 萬美元，其中包括1.731 億美元現金，其中部分已使用為購買 Hennessy Cathy 和 Pro sale 提供資金，我們在第四季度後完成了收購。我們很高興擁有他們，他們將在 2024 年第一季開始向我們報告。

In terms of acquisitions, DXP's acquisition pipeline continues to grow and the market continues to present compelling opportunities looking forward, we expect this to continue through fiscal 2024, and we look forward to closing a minimum of a one to three additional acquisitions by the middle of 2024.

在收購方面，DXP 的收購管道持續成長，市場持續提供令人信服的機會，我們預計這種情況將持續到 2024 財年，我們期待在 2024 財年中期完成至少一到三項額外收購2024 年。

In terms of capital allocation, we repurchased or returned $54.7 million to shareholders via our share repurchase program in fiscal 2023. Our totaled 1.7 million shares of DXP stock.

在資本配置方面，我們在2023財年透過股票回購計畫向股東回購或返還了5,470萬美元。我們共有 170 萬股 DXP 股票。

The last item I briefly want to touch upon is the outstanding progress we have made with our accounting and finance team during this year. We invested heavily in growing our finance and accounting department by hiring a new CEO, a new Director of Technical Accounting, then additional assistant controllers.

我想簡要提及的最後一個項目是我們的會計和財務團隊在今年取得的突出進展。我們在財務和會計部門的發展上投入了大量資金，聘請了一位新的執行長、一位新的技術會計總監，然後聘請了更多的助理財務總監。

This has allowed us to continue on the path of continuous improvement, which this year is expressing itself in the remediation of two material weaknesses, positioned us to remediate the risk in fiscal year 2024. As I mentioned back in 2021, we started the transition to PWC.

這使我們能夠繼續走上持續改進的道路，今年我們透過修復兩個重大缺陷來體現這一點，使我們能夠在 2024 財年修復風險。正如我在 2021 年所提到的，我們開始向普華永道過渡。

Progress is never a straight line and we are staying nimble as we continue to grow. We are at an inflection point, and I'm excited to work with PDVSA, our enhanced team and the entirety of DXP as we are scaling and real-time organically and through acquisitions.

進步從來都不是一條直線，我們在不斷成長的過程中保持敏捷。我們正處於一個轉捩點，我很高興能與 PDVSA、我們的增強團隊以及整個 DXP 合作，因為我們正在透過收購進行有機擴展和即時擴展。

In summary, we are pleased with our fiscal 2023 performance, we achieved record adjusted earnings performance at $4.9 per share, and our cash flow from operations also accelerated with further rooms with further room for improvement, higher earnings, improved working capital efficiency delivered a 54% free cash flow conversion to EBITDA on 13.5% sales growth.

總而言之，我們對2023 財年的業績感到滿意，我們實現了每股4.9 美元的創紀錄的調整後盈利業績，我們的營運現金流也加速了，更多的房間有進一步改進的空間，更高的收益，改善的營運資金效率實現了54銷售額增長 13.5% 時自由現金流轉化為 EBITDA 的百分比。

These achievements contributed to our remarkable annual return on invested capital of 38%, demonstrating gains from our strategic initiatives as well as our disciplined approach to capital allocation and our acquisition strategy heading into 2024, we refreshed our balance sheet, which allowed us to continue to invest in the business, both again, both organically excuse me and through acquisitions through the cycle, while also returning capital to our shareholders, an exciting time to be a part of DXP.

這些成就為我們帶來了38% 的驚人年度投資回報率，展示了我們的策略舉措以及嚴格的資本配置方法和我們的收購策略帶來的收益，進入2024 年，我們更新了資產負債表，這使我們能夠繼續再次投資業務，既有機地進行，又透過整個週期的收購，同時也向我們的股東返還資本，這是成為 DXP 一部分的令人興奮的時刻。

We are excited about the future and we will keep our eyes focused on those things we can control and what is ahead of us, what it is, what is in front of us is always bigger than what is behind us and the best is always ahead and we look forward to a successful 2024.

我們對未來感到興奮，我們將把目光集中在那些我們可以控制的事情上，以及我們前面的事情，它是什麼，我們前面的總是比我們後面的更大，最好的總是在前面我們期待2024 年取得成功。

I will now turn the call over for your questions.

我現在將轉接電話詢問您的問題。

The floor is now open for your questions. (Operator Instructions)

現在請大家提問。（操作員說明）

Max Kane, Stephens Inc.

馬克斯凱恩，史蒂芬斯公司

Good afternoon. Thank you for taking my questions.

午安.感謝您回答我的問題。

Good afternoon, Max, I'm doing fine. What about yourself?

下午好，麥克斯，我很好。你自己呢？

Good, good. Yes, the first question I have is on can you provide any color on quarter-to-date trends for daily sales, including recent acquisitions, if that's possible?

好好。是的，我的第一個問題是，如果可能的話，您能否提供有關每日銷售季度至今趨勢的任何信息，包括最近的收購？

Yes, no, absolutely. What I'll do is I'll call now and walk back through Q4 and then bring you through February, which we have a flash just in terms of through February.

是的，不，絕對是。我現在要做的是，我現在打電話，回顧一下第四季度，然後帶大家回顧一下二月份，我們對二月份進行了簡要介紹。

So in terms of our sales per business day, in October that was 6.392 and November 6.553 and then in December, 7.1 to 5 million in January for severance of 5.9 to $5 million and then in February, $6.37 million. What I'd note there matches off our January First Interstate is up 4.5% year over year. And then our February flash is up 2.5% year over year on a comparative.

因此，就我們每個工作日的銷售額而言，10 月份為6.392 美元，11 月份為6.553 美元，12 月份為7.1 至500 萬美元，1 月份的遣散費為5.9 至500 萬美元，2 月份為637 萬美元。我注意到我們的一月一號州際公路年增了 4.5%。然後我們 2 月的快閃記憶體年增了 2.5%。

Yes.

是的。

Got you.

明白你了。

Thank you for the color on that. And I'm wondering the number of selling days you're assuming for?

謝謝你的顏色。我想知道您預計的銷售天數是多少？

1Q And we will have 63 actually business days in the Q1, which is one day lead experts on what we had in 2023. And probably Of note, in March of last year, we had 23 business days. And this year we'll have 20 business days. So three less business days Got you. And then yes, just last question from me on how you're thinking about 1Q adjusted EBITDA margins progressing versus 4Q 23 and in our EBITDA margins today, partially are a reflection of mix, meaning at a very high level service centers versus IPS versus supply chain.

第一季我們實際上將有 63 個工作日，這是我們 2023 年情況的一天。值得注意的是，去年 3 月，我們有 23 個工作天。今年我們將有 20 個工作天。這樣就少了三個工作天了。然後是的，我的最後一個問題是關於您如何看待第一季度調整後的EBITDA 利潤率與23 年第四季度相比的進展，以及我們今天的EBITDA 利潤率，部分反映了混合，這意味著在非常高水準的服務中心與IPS 與供應鏈。

And then as you kind of narrow down from there, some of our more recent themes of water, wastewater and air compressors dependent upon that mix contribution kind of impacts our EBITDA margins today. So all that to say is that, you know, our goal is always 10% plus. And we feel like we've got the appropriate mix today, assuming all businesses are performing to kind of achieve that. But it is influenced a little bit by the mix and the different contributions.

然後，當你從那裡縮小範圍時，我們最近的一些水、廢水和空氣壓縮機主題都依賴這種組合貢獻，這在某種程度上影響了我們今天的 EBITDA 利潤率。所以要說的是，我們的目標始終是 10% 以上。我們覺得今天我們已經有了適當的組合，假設所有企業都在努力實現這一目標。但它受到混合和不同貢獻的影響。

Got it. Thanks for the color, and I'll go ahead and turn it back.

知道了。謝謝你的顏色，我會繼續把它轉回來。

There are no further questions at this time. Mr. David Little, I turn the call back over to you.

目前沒有其他問題。大衛·利特爾先生，我將電話轉回給您。

Yes, thanks. I would I'd like to conclude by thanking our sales team thinking our inside sales team in skiing operations, thinking accounting, thanking everybody everybody contributed to a what I consider a really solid great year in and as it's really appreciated, we're doing a lot of really good things for our customers and a lot of the growth initiatives that I think are helping.

對了謝謝。最後，我想感謝我們的銷售團隊，感謝我們的內部銷售團隊在滑雪運營方面的工作，考慮會計，感謝每個人為我認為非常堅實的偉大一年做出的貢獻，並且非常感謝，我們正在做對我們的客戶來說有很多真正好的事情，而且我認為有很多成長舉措是有幫助的。

We look forward to 2024 and onward and upward. So I think thank you, everybody, and thanks all are DX people and thank all our stakeholders out there. We'll see you guys next time.

我們期待 2024 年以及未來的發展。所以我想感謝大家，感謝所有 DX 人員，感謝我們所有的利害關係人。我們下次再見。

There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

目前沒有其他問題。女士們、先生們，今天的電話會議到此結束。您現在可以斷開連線。