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    Zachary Marriott • Stephens Inc.

    Zachary Marriott's questions to DXP Enterprises Inc (DXPE) leadership

    Zachary Marriott's questions to DXP Enterprises Inc (DXPE) leadership • Q4 2024

    Question

    Zachary Marriott of Stephens Inc. inquired about the quarter-over-quarter trend in gross margins and asked about any noteworthy factors that could impact that trajectory moving into the next quarter.

    Answer

    Executive Kent Yee attributed the significant Q3 to Q4 gross margin increase to a favorable business mix, particularly the higher-margin water and wastewater acquisitions contributing more significantly. CEO David Little added that after achieving 10% EBITDA margins, the company has set a new goal of 11%, with employee compensation aligned to this target to drive continued improvement.

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    Zachary Marriott's questions to DXP Enterprises Inc (DXPE) leadership • Q4 2024

    Question

    Zachary Marriott of Gabelli Funds inquired about the quarter-over-quarter trend in margins and any noteworthy factors that might alter that trajectory moving forward.

    Answer

    Executive Kent Yee attributed the significant Q3 to Q4 gross margin increase to a favorable business mix, particularly from higher-margin water and wastewater acquisitions contributing more significantly. He noted that while they hope for this trend to continue, new sales initiatives could also impact the mix. CEO David Little added that after achieving the 10% EBITDA margin goal, the company has now set a new target of 11%, aligning employee compensation with this objective and expressing confidence in continued improvement.

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