DXP Enterprises, Inc. (NASDAQ:DXPE) Q4 2015 Earnings Conference Call - Final Transcript
Feb 26, 2016 • 10:00 am ET
Good day and welcome to DXP Enterprises Incorporated Fourth Quarter and Year-end Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mac McConnell, Senior Vice President of Finance. Please go ahead, sir.
Thank you. This is Mac McConnell, CFO of DXP. Good morning and thank you for joining us. Welcome to DXP's fourth quarter conference call. David Little, our CEO, will also speak to you and answer your questions. Before we begin, I want to remind you that today's discussion will include forward-looking statements. We want to caution you that such statements are predictions and actual events or results can differ materially. A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis is contained in our SEC filings, but DXP assumes no obligation to update that information. I will begin with a summary of DXP's fourth quarter 2015 results. David Little will share his thoughts regarding the quarter results. Then we will be happy to answer questions.
Sales for the fourth quarter of 2015 decreased 27.2% to $278.7 million from $382.5 million for the fourth quarter of 2014. After excluding fourth quarter 2015 sales of $5.7 million for businesses acquired, sales for the fourth quarter decreased $109.5 million or 28.6% on a same-store sales basis. This decrease was primarily the result of declines to sales to customers engaged in the upstream oil and gas industry, our manufacturing equipment for the upstream oil and gas industry. The strength of the US dollar contributed to the sales decline. Sales for our Canadian operations were $29.5 million for the fourth quarter of 2015. The change in the exchange rate reduced sales by approximately $4.6 million. Sales by our Service Center segment in the fourth quarter of 2015 decreased $65.1 million or 25.8% to $187.4 million compared to $252.5 million of sales for the fourth quarter of 2014.
After excluding 2015 Service Center segment sales of $5.7 million from acquired businesses, Service Center segment sales for the fourth quarter of 2015 decreased $70.8 million or 28% from the fourth quarter of 2014 on a same-store sales basis. This sales decrease is primarily the result of decreased sales of bearings, rotating equipment, metalworking products and safety services to customers engaged in the oil and gas business. The strength of the US dollar also contributed to the sales decline. Service Center sales for our Canadian operations were $25.6 million. The change in the exchange rate reduced sales by approximately $4 million compared to the 2014 exchange rate. Sales of Innovative Pumping Solutions products decreased $36.9 million or 41.4% to $52.2 million compared to $89.1 million for the 2014 fourth quarter. This decrease was primarily the result of a decline in capital spending by oil and gas producers and related businesses.
Sales for Supply Chain Services decreased $1.9 million or 4.6% to $39.1 million compared to $41 million for the 2014 fourth quarter. The decrease is primarily