Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the DXP Enterprises Fourth Quarter 2024 Earnings Release Conference Call. [Operator Instructions] I would now like to turn the call over to Kent Yee, Chief Financial Officer. Please go ahead.

Thank you, Eric, and thank you, everyone. This is Kate, and welcome to DXP's Q4 2024 Conference Call to discuss our results for the fourth quarter and fiscal year ending December 31, 2024. 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. A detailed discussion of the many risk 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. 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. I will now turn the call over to David Little, our Chairman and CEO, to provide his thoughts and a summary of our fourth quarter and fiscal 2024 performance and financial results. David? SP1 Thanks, David.

And thanks to everyone on our 2024 fourth quarter and fiscal 2024 conference call. I am pleased to report another record year for our key financial metrics sales per business day, gross profit margins and adjusted EBITDA margin. These results demonstrate the power of our people, products and processes to serve the needs of our customers. They also highlight the benefits 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 fiscal 2024 results with you on behalf of over 3,028 DXPeople. Congratulations to all our stakeholders and a special thanks to our DXPeople you can trust. Fiscal 2024 was another successful year for DXP, growing sales 7.4% to $1.8 billion. We are excited to move into fiscal 2025 with the momentum and results of our 2 DXP had another year of winning at MAX margins and gross profit margins increased by 77 basis points to 30.9%. Fiscal 2024 was about winning and [indiscernible] margins while also operating efficiencies and investments. We accomplished this goal by either maintaining or increasing margins on our business segments and executing 7 acquisitions in fiscal '24. Fiscal '24 was a record year in terms of sales dollars achieving new high sales watermark for DXP while achieving the second fiscal year of 10% plus adjusted EBITDA margins. We continue to successfully execute on our end-market goals of diversification and scale. And at the end of fiscal '24, oil and gas was 23% of our business, followed by water and wastewater and chemical at 10%, and food and beverage and manufacturing at 7% and general industry at 13%. In our words, DXP has continued to deliver on balancing our risks from an end market perspective, and we have…

Thank you, David, and thank you to everyone for joining us for our review of our fourth quarter and fiscal year 2024 financial results. Fiscal 2024 was another record year and new watermark in terms of sales and gross margins. Additionally, as our second fiscal year of 10% plus adjusted EBITDA margins. We are excited to report these results, and we look forward to moving into fiscal 2025. Specifically, fiscal year 2024 financial performance reflects our ability to continue to execute on key themes that we have been focused on over the past 3 to 5 years. Overall, DXP's fiscal 2024 financial results reflect the following: Strong year-over-year sales growth driven by Innovative Pumping Solutions and acquisitions; continued gross margin strength and stability; consistent operating leverage leading to sustained adjusted EBITDA margins, more notably our second year of 10%-plus adjusted EBITDA margins; continued execution on our acquisition strategy, completing 7 acquisitions; and DXP Water crossing the $100 million-plus sales mark; successfully refinancing and repricing our term loan B, including raising an incremental $105 million and reducing interest costs by 100 basis points; and continued capital return to shareholders through our share repurchase program. Total sales for the fourth quarter increased 15.7% year-over-year to $470.9 million. That said, this reflects improvement in sales per business day going from $7.39 million in Q3 with 64 business days to 62 days in Q4 or $7.595 million sales per day in Q4. Acquisitions that have been with DXP for less than a year contributed $34.8 million in sales during the quarter. Total sales for DXP for fiscal year 2024 were $1.8 billion, increasing 7.4% compared to fiscal 2023. For the full year, acquisitions contributed $98.5 million in sales. Average daily sales for the fourth quarter were $7.595 million per day, as previously mentioned, or…

[Operator Instructions] Your first question comes from the line of Zach Marriott with Stephens.

Is there any color you can share on daily sales trends by month for both Q4 and so far into Q1?

Yes. No, absolutely, Zach. Starting back in Q4 in October, if you will, sales per business day was $7.2 million, $7.5 million and then $8.1 million for December. And then starting off here in 2025, sales per business day for January and February were $6.8 million per day in January and then $7.8 million per day in February.

Great. And then also for margins quarter-over-quarter. How are those trending? And are there any noteworthy factors in March that may change that trajectory?

I don't think we have full visibility into our margins at this point in time for Q1 necessarily. But I think what you're getting at, Zach, is from Q3 to Q4, our gross margins went up pretty significantly. And I think that's just a continued function of mix. Overall, once again, our water, wastewater acquisitions tend to be at an overall higher gross as well as EBITDA margins in with us at the end of the year closing out some of the acquisitions and then performing with us longer, they started to contribute in a higher fashion. So I think that's what you saw going from Q3 to Q4. And obviously, going into Q1, we would like for that to continue. But we also have some, once again, always some strong initiatives in driving sales dollars, if you will, that impact mix on our base businesses.

I want to jump in and add just a little bit. Our goals have been to get to 10% EBITDA margins. We were told that would make a big difference in the valuation of our company. And so we hit that. And so now we've changed our goal to 11. People are their pays in alignment with those goals. And so they obviously make more if they hit them than if they don't. And so we're really pleased with the progress we've made throughout the year, and we look forward to continue to improve.

I will now turn the call back over to David Little, Chairman and CEO, for closing remarks. Please go ahead.

Thanks, Eric. Yes. It was a -- our peer group didn't have really any growth this year and most of them had some negative growth. And of course, I'm trying to change our peer group from being oil and gas people. So we've done a really, really good job of continuing to sell as many pumps and equipment as we can into the oil and gas deal, but at the same time, reduce it as a percent of our overall business. And so we're kind of doing everything that's really possible in terms of taking the company into a more diversified market basis, and we're being rewarded for that. We're also doing everything we can to increase gross profit margins and yet be fair to our customers. And we also are looking at a lot of things where we're kind of heavy on the investment side on trying to drive scale and efficiencies, but we see some improvements coming as we continue to move forward. And so I think our goal of 11% EBITDA margins is very attainable and pretty much attainable in a short period of time. The -- what goes against that a possible headwind as if all these tariffs and things like that slow the economy down then it's obviously hard to get scale -- sales are declining. We don't see any of that yet. We see the uncertainty of comments that are being made around tariffs and inflation. I will reiterate that inflation is within reason is good for us. It raises our sales, it raises our value of inventory and we don't get -- we don't really get pressures to lower our margins. So in general, that's good. Of course, we have to follow that up with pay raises for our people and things like that, things cost a little more. But managed all properly, that doesn't affect us, and we're pretty good at that because we've had a lot of inflation over the years that I've been at the helm. So I think we feel good. Again, I want to thank our DXPeople. We're working hard on on a lot of different projects in addition to their normal daily routine. And so I appreciate all those efforts. We're performing pretty well. So from a stakeholder point of view, and I'm a large one, I appreciate those efforts. And so I think with that, I'd just like to thank everybody. And of course, if the stock too low, well, then I'm going to buyback. And if it's too high. I'm going to celebrate. So thank you very much, and you all have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.