SEGMENT REPORTING

3 Months Ended

Mar. 31, 2025

We have three reportable and operating segments: Service Centers, Innovative Pumping Solutions and Supply Chain Services.

The Service Centers segment is engaged in providing maintenance, MRO products and equipment, including logistics capabilities, to industrial customers. The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products and safety services categories.

The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, re-manufactures pumps, manufactures branded private label pumps, and provides products and process lines for the water and wastewater treatment industries.

The Supply Chain Services segment provides a wide range of MRO products and manages all or part of a customer's supply chain, including warehouse and inventory management.

Sales are shown net of intersegment eliminations.

Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions.

These segments were determined primarily on the distribution channels of the products and services offered and the nature of the customer markets and the primary driver of the customers spend. The Company's CODM directs the allocation of resources to these segments based upon historical and current revenue, direct operating expenses, operating income, and capital expenditures of each respective segment. The allocation of resources across these segments is dependent upon, among other factors, the segments' historical or future expected operating margins; the segments' historical or future expected returns on capital; outlook within a specific market; opportunities to grow profitability; new products, services or new customer accounts; confidence in management; and competitive landscape and intensity.

As a part of the Company's annual business planning, the CODM reviews our reportable segment composition and financial performance. As a result of this review, on January 1st, 2025, we moved certain branch locations previously reported under our IPS segment to our SC segment. Prior period segment information has not been recast, as the changes to our segment composition did not have a material impact on the operating results of our reportable segments.

The following table sets out financial information related to the Company's segments excluding amortization (in thousands):


Three Months Ended March 31,	Service Centers		Innovative Pumping Solutions		Supply Chain Services		Total
2025
Total Revenue	$	327,075	$	86,182	$	63,312	$	476,569
Operating income for reportable segments	47,045		13,406		5,564		66,015
Identifiable assets at year end	782,602		319,897		88,481		1,190,980
Capital expenditures	2,037		574		—		2,611
Depreciation	937		795		8		1,740
Amortization of finance leases	$	1,137	$	192	$	41	$	1,370


Three Months Ended March 31,	Service Centers		Innovative Pumping Solutions		Supply Chain Services		Total
2024
Total Revenue	$	288,435	$	62,216	$	61,984	$	412,635
Operating income for reportable segments	40,320		6,970		5,262		52,552
Identifiable assets at year end	666,756		261,967		86,850		1,015,573
Capital expenditures	906		640		13		1,559
Depreciation	742		853		8		1,603
Amortization of finance leases	$	772	$	94	$	30	$	896

The following table presents reconciliations of income from operations for reportable segments to the consolidated income before taxes (in thousands):


	Three Months Ended March 31,
	2025		2024

Income from operations for reportable segments	$	66,015	$	52,552
Adjustment for:
Amortization of intangible assets	5,355		4,369
Corporate expenses	20,145		19,052
Income from operations	$	40,515	$	29,131
Interest expense	14,660		15,544
Other income, net	(1,318)		(1,968)
Income before income taxes	$	27,173	$	15,555

Corporate expenses includes selling, general, and administrative expenses, amortization of finance leases, and other expenses that are not directly attributable to a reportable segment. The Company had capital expenditures at corporate of $17.3 million and $1.3 million for the periods ended March 31, 2025 and 2024, respectively.

The Company had identifiable assets at corporate of $191.5 million and $168.6 million as of March 31, 2025 and 2024, respectively. Corporate depreciation was $0.6 million and $0.6 million for the periods ended March 31, 2025 and 2024, respectively.

Amortization of finance leases for Corporate was $0.1 million and $0.1 million for the years ended March 31, 2025 and 2024, respectively.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

DXP ENTERPRISES INC 10-Q