Watch List Profile: DXP Enterprises, Inc.

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DXP Enterprises, Inc. is a fast-growing industrial supply and industrial electrical contractor operating in the natural resources (oil and gas, wood products, mining) markets. DXPE also serves the construction, chemical, municipal, food and beverage, and pulp and paper industries and has done so since 1908; but its robust growth in recent years is more consistent with a teenager than a centenarian.

The company operates out of its 38 service centers in the southwestern Rocky Mountain, mid-western and southeastern regions of the United States. In 2006, the company undertook at least four key acquisitions enhancing its offerings to the oilfield pipeline and municipalities markets. The businesses added increased specializations in pumping equipment (sales, engineering and maintenance) as well as welding and safety products supply and training, and consulting services. Also in 2006, the company completed an offering of 1 million shares of common stock at $47.00 per share. The proceeds were used to retire $35 million of the company’s $50 million credit facility and provide available monies for unspecified acquisitions.

Underscoring the company’s youthful excitement are its very muscular recent financial returns. DXPE’s 2006 revenues were $279.8 million, up 50% from $185.4 million in 2005. And, revenues are on pace to reach north of $350 million this year, close to a 30% improved. Moreover, EPS more than quadrupled from $0.50 in 2004 to $2.09 per share in 2006, and are up 120% from $1.24 in 2005. Estimates peg 2008 EPS as high as $2.85 and at potentially $3.30 for 2008. This company should make varsity real soon.