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Share Name | Share Symbol | Market | Type |
---|---|---|---|
DXP Enterprises Inc | NASDAQ:DXPE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.07 | -0.14% | 50.90 | 50.33 | 51.29 | 51.62 | 50.48 | 51.18 | 65,077 | 01:00:00 |
☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 2017
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to
|
Texas
|
76-0509661
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
|
7272 Pinemont, Houston, Texas 77040
|
||
(Address of principal executive offices, including zip code)
|
||
(713) 996-4700
|
||
(Registrant's telephone number, including area code)
|
September 30, 2017
|
December 31, 2016
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
19,473
|
$
|
1,590
|
||||
Restricted Cash
|
3,614
|
-
|
||||||
Trade accounts receivable, net of allowance for doubtful accounts of $9,634 in 2017 and $8,160 in 2016
|
165,235
|
148,919
|
||||||
Inventories, net
|
87,720
|
83,699
|
||||||
Costs and estimated profits in excess of billings on
uncompleted contracts
|
24,191
|
18,421
|
||||||
Prepaid expenses and other current assets
|
4,290
|
2,138
|
||||||
Income taxes recoverable
|
2,404
|
2,558
|
||||||
Total current assets
|
306,927
|
257,325
|
||||||
Property and equipment, net
|
55,703
|
60,807
|
||||||
Goodwill
|
187,591
|
187,591
|
||||||
Other intangible assets, net of accumulated amortization of $80,105 in 2017 and $70,027 in 2016
|
83,045
|
94,831
|
||||||
Other long-term assets
|
1,809
|
1,498
|
||||||
Total assets
|
$
|
635,075
|
$
|
602,052
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current maturities of long-term debt
|
$
|
3,365
|
$
|
51,354
|
||||
Trade accounts payable
|
81,518
|
78,698
|
||||||
Accrued wages and benefits
|
14,735
|
16,962
|
||||||
Customer advances
|
4,910
|
2,441
|
||||||
Billings in excess of costs and estimated profits on uncompleted contracts
|
3,032
|
2,813
|
||||||
Other current liabilities
|
14,726
|
14,391
|
||||||
Total current liabilities
|
122,286
|
166,659
|
||||||
Long-term debt, less current maturities and unamortized debt issuance costs of $10,531 in 2017 and $992 in 2016
|
239,042
|
173,331
|
||||||
Deferred income taxes
|
12,102
|
9,513
|
||||||
Commitments and contingencies (Note 13)
|
||||||||
Equity:
|
||||||||
Series A preferred stock, 1/10th vote per share; $1.00 par value; liquidation preference of $112 ($100 per share); 1,000,000 shares authorized; 1,122 shares issued and outstanding
|
1
|
1
|
||||||
Series B convertible preferred stock, 1/10
th
vote per share; $1.00 par value; $100 stated value; liquidation preference of $1,500 ($100 per share); 1,000,000 shares authorized; 15,000 shares issued and outstanding
|
15
|
15
|
||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; 17,388,910 at September 30, 2017 and 17,197,380 at December 31, 2016 shares issued
|
174
|
172
|
||||||
Additional paid-in capital
|
152,857
|
152,313
|
||||||
Retained earnings
|
127,560
|
117,396
|
||||||
Accumulated other comprehensive loss
|
(19,309
|
)
|
(18,274
|
)
|
||||
Total DXP Enterprises, Inc. equity
|
261,298
|
251,623
|
||||||
Noncontrolling interest
|
347
|
926
|
||||||
Total equity
|
261,645
|
252,549
|
||||||
Total liabilities and equity
|
$
|
635,075
|
$
|
602,052
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Sales
|
$
|
251,930
|
$
|
230,025
|
$
|
741,155
|
$
|
739,801
|
||||||||
Cost of sales
|
184,967
|
166,205
|
540,741
|
535,560
|
||||||||||||
Gross profit
|
66,963
|
63,820
|
200,414
|
204,241
|
||||||||||||
Selling, general and
administrative expenses
|
60,453
|
58,887
|
175,411
|
192,461
|
||||||||||||
Income from operations
|
6,510
|
4,933
|
25,003
|
11,780
|
||||||||||||
Other income, net
|
(153
|
)
|
(251
|
)
|
(324
|
)
|
(397
|
)
|
||||||||
Interest expense
|
4,928
|
4,338
|
12,573
|
11,698
|
||||||||||||
Income before provision for income taxes
|
1,735
|
846
|
12,754
|
479
|
||||||||||||
Provision (benefit) for income taxes
|
(1,176
|
)
|
664
|
2,880
|
459
|
|||||||||||
Net income
|
2,911
|
182
|
9,874
|
20
|
||||||||||||
Net loss attributable to noncontrolling interest
|
(55
|
)
|
(81
|
)
|
(360
|
)
|
(301
|
)
|
||||||||
Net income attributable to DXP Enterprises, Inc.
|
2,966
|
263
|
10,234
|
321
|
||||||||||||
Preferred stock dividend
|
23
|
23
|
68
|
68
|
||||||||||||
Net income attributable to
common shareholders
|
$
|
2,943
|
$
|
240
|
$
|
10,166
|
$
|
253
|
||||||||
Net income
|
$
|
2,911
|
$
|
182
|
$
|
9,874
|
$
|
20
|
||||||||
Cumulative translation adjustment
|
830
|
19
|
|
(1,035
|
)
|
409
|
|
|||||||||
Comprehensive income
|
$
|
3,741
|
$
|
201
|
$
|
8,839
|
$
|
429
|
||||||||
Basic earnings per share attributable to DXP Enterprises, Inc.
|
$
|
0.17
|
$
|
0.02
|
$
|
0.58
|
$
|
0.02
|
||||||||
Weighted average common
shares outstanding
|
17,394
|
14,600
|
17,402
|
14,529
|
||||||||||||
Diluted earnings per share attributable to DXP Enterprises, Inc.
|
$
|
0.16
|
$
|
0.02
|
$
|
0.56
|
$
|
0.02
|
||||||||
Weighted average common shares
and common equivalent
shares outstanding
|
18,234
|
15,440
|
18,242
|
15,369
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2017
|
2016
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income attributable to DXP Enterprises, Inc.
|
$
|
10,234
|
$
|
321
|
||||
Less net loss attributable to non-controlling interest
|
(360
|
)
|
(301
|
)
|
||||
Net income
|
9,874
|
20
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
7,655
|
9,070
|
||||||
Amortization of intangible assets
|
12,943
|
13,557
|
||||||
Bad debt expense
|
1,466
|
1,476
|
||||||
Amortization of debt issuance costs
|
1,071
|
673
|
||||||
Write off of debt issuance costs
|
578
|
967
|
||||||
Compensation expense for restricted stock
|
1,392
|
1,944
|
||||||
Tax loss related to vesting of restricted stock
|
-
|
619
|
||||||
Deferred income taxes
|
2,000
|
(121
|
)
|
|||||
Changes in operating assets and liabilities, net of
assets and liabilities acquired in business combinations: |
||||||||
Trade accounts receivable
|
(16,397
|
)
|
9,965
|
|||||
Costs and estimated profits in excess of billings on
uncompleted contracts
|
(5,701
|
)
|
5,067
|
|||||
Inventories
|
(3,827
|
)
|
5,818
|
|||||
Prepaid expenses and other assets
|
(2,362
|
)
|
(608
|
)
|
||||
Trade accounts payable and accrued expenses
|
(354
|
)
|
(8,560
|
)
|
||||
Billings in excess of costs and estimated profits on
uncompleted contracts
|
189
|
(4,171
|
)
|
|||||
Net cash provided by operating activities
|
8,527
|
35,716
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(2,157
|
)
|
(3,843
|
)
|
||||
Proceeds from sale of property and equipment
|
-
|
1,198
|
||||||
Equity method investment contribution
|
-
|
(3,214
|
)
|
|||||
Net cash used in investing activities
|
(2,157
|
)
|
(5,859
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from debt
|
728,822
|
324,229
|
||||||
Principal payments on revolving line of credit and other long-term
debt
|
(701,561
|
)
|
(356,497
|
)
|
||||
Costs for registration of common shares
|
-
|
5,959
|
||||||
Debt issuance fees
|
(11,188
|
)
|
(616
|
)
|
||||
Loss for non-controlling interest owners, net of tax
|
(219
|
)
|
(186
|
)
|
||||
Dividends paid
|
(68
|
)
|
(68
|
)
|
||||
Payment for employee taxes withheld from stock awards
|
(848
|
)
|
(238
|
)
|
||||
Tax loss related to vesting of restricted stock
|
-
|
(619
|
)
|
|||||
Net cash provided by (used in) financing activities
|
14,938
|
(28,036
|
)
|
|||||
EFFECT OF FOREIGN CURRENCY ON CASH
|
189
|
(85
|
)
|
|||||
NET CHANGE IN CASH
|
21,497
|
1,736
|
||||||
CASH AT BEGINNING OF PERIOD
|
1,590
|
1,693
|
||||||
CASH AT END OF PERIOD
|
$
|
23,087
|
$
|
3,429
|
Topic
|
Method of Adoption
|
Impact on Consolidated Financial Statements
|
Recognize all excess tax benefits and tax deficiencies as income tax benefit or expense
|
Prospective
|
The Company recognized $0.2 million and $0.3 million of excess tax benefit in income taxes in the three and nine months ended September 30, 2017, respectively, decreasing the effective tax rate for each period.
|
Excess tax benefits and deficiencies on the statement of cash flows are classified as an operating activity
|
Prospective
|
The Company recognized $0.3 million of excess tax benefit in the nine months ended September 30, 2017 as an operating activity. Prior to the adoption of the ASU 2016-09, the excess tax expense in the nine months ended September 30, 2016 was $0.6 million recognized as a financing activity.
|
Employee taxes paid when an employer withholds shares for tax-withholding purposes on the statement of cash flows are classified as financing activity
|
Retrospective
|
The Company reclassified $0.2 million of employee taxes paid from cash flows from operating activities to cash flows from financing on the Consolidated Statements of Cash Flows in the nine months ended September 30, 2016.
|
Accounting for forfeitures and tax withholding elections
|
Prospective
|
The Company has not changed its accounting policy for forfeitures. There is no significant impact on Consolidated Financial Statements.
|
September 30,
2017
|
December 31,
2016
|
|||||||
Finished goods
|
$
|
75,213
|
$
|
74,269
|
||||
Work in progress
|
12,507
|
9,430
|
||||||
Inventories, net
|
$
|
87,720
|
$
|
83,699
|
September 30,
2017
|
December 31,
2016
|
|||||||
Costs incurred on uncompleted contracts
|
$
|
31,584
|
$
|
25,214
|
||||
Estimated profits, thereon
|
3,097
|
6,274
|
||||||
Total
|
34,681
|
31,488
|
||||||
Less: billings to date
|
13,530
|
15,864
|
||||||
Net
|
$
|
21,151
|
$
|
15,624
|
September 30,
2017
|
December 31,
2016
|
|||||||
Costs and estimated profits in excess
of billings on uncompleted contracts
|
$
|
24,191
|
$
|
18,421
|
||||
Billings in excess of costs and estimated
profits on uncompleted contracts
|
(3,032
|
)
|
(2,813
|
)
|
||||
Translation adjustment
|
(8
|
)
|
16
|
|||||
Net
|
$
|
21,151
|
$
|
15,624
|
September 30,
2017
|
December 31,
2016
|
|||||||
Land
|
$
|
2,345
|
$
|
2,346
|
||||
Buildings and leasehold improvements
|
16,668
|
16,259
|
||||||
Furniture, fixtures and equipment
|
96,337
|
94,784
|
||||||
Less – Accumulated depreciation
|
(59,647
|
)
|
(52,582
|
)
|
||||
Total property and equipment, net
|
$
|
55,703
|
$
|
60,807
|
Goodwill
|
Other
Intangible Assets
|
Total
|
||||||||||
Balance as of December 31, 2016
|
$
|
187,591
|
$
|
94,831
|
$
|
282,422
|
||||||
Translation adjustment
|
-
|
1,157
|
1,157
|
|||||||||
Amortization
|
-
|
(12,943
|
)
|
(12,943
|
)
|
|||||||
Balance as of September 30, 2017
|
$
|
187,591
|
$
|
83,045
|
$
|
270,636
|
September 30,
2017
|
December 31,
2016
|
|||||||
Service Centers
|
$
|
154,473
|
$
|
154,473
|
||||
Innovative Pumping Solutions
|
15,980
|
15,980
|
||||||
Supply Chain Services
|
17,138
|
17,138
|
||||||
Total
|
$
|
187,591
|
$
|
187,591
|
As of September 30, 2017
|
As of December 31, 2016
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Carrying Amount, net
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Carrying Amount, net
|
|||||||||||||||||||
Customer relationships
|
$
|
162,201
|
$
|
(79,315
|
)
|
$
|
82,886
|
$
|
163,022
|
$
|
(68,446
|
)
|
$
|
94,576
|
||||||||||
Non-compete agreements
|
949
|
(790
|
)
|
159
|
1,836
|
(1,581
|
)
|
255
|
||||||||||||||||
Total
|
$
|
163,150
|
$
|
(80,105
|
)
|
$
|
83,045
|
$
|
164,858
|
$
|
(70,027
|
)
|
$
|
94,831
|
September 30,
2017
|
December 31,
2016
|
|||||||
ABL Revolver
|
$
|
-
|
$ |
-
|
||||
Term Loan B
|
250,000
|
-
|
||||||
Line of credit
|
-
|
|
147,600
|
|||||
Term loan
|
-
|
74,500
|
||||||
Promissory note payable in monthly installments at 2.9% through
January 2021, collateralized by equipment
|
2,938
|
3,577
|
||||||
Less unamortized debt issuance costs
|
(10,531
|
)
|
(992
|
)
|
||||
242,407
|
224,685
|
|||||||
Less: Current portion
|
(3,365
|
)
|
(51,354
|
)
|
||||
Long-term debt less current maturities
|
$
|
239,042
|
$
|
173,331
|
Fiscal Quarter
|
Secured Leverage Ratio
|
December 31, 2017
|
5.75:1.00
|
March 31, 2018
|
5.75:1.00
|
June 30, 2018
|
5.50:1.00
|
September 30, 2018
|
5.50:1.00
|
December 31, 2018
|
5.25:1.00
|
March 31, 2019
|
5.25:1.00
|
June 30, 2019
|
5.00:1.00
|
September 30, 2019
|
5.00:1.00
|
December 31, 2019
|
4.75:1.00
|
March 31, 2020
|
4.75:1.00
|
June 30, 2020 and each Fiscal Quarter thereafter
|
4.50:1.00
|
Number of
Shares
|
Weighted Average
Grant Price
|
|||||||
Non-vested at December 31, 2016
|
143,380
|
$
|
26.76
|
|||||
Granted
|
18,672
|
$
|
34.07
|
|||||
Forfeited
|
(298
|
)
|
$
|
59.60
|
||||
Vested
|
(79,853
|
)
|
$
|
25.14
|
||||
Non-vested at September 30, 2017
|
81,901
|
$
|
29.88
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Basic:
|
||||||||||||||||
Weighted average shares outstanding
|
17,394
|
14,600
|
17,402
|
14,529
|
||||||||||||
Net income attributable to DXP Enterprises, Inc.
|
$
|
2,966
|
$
|
263
|
$
|
10,234
|
$
|
321
|
||||||||
Convertible preferred stock dividend
|
23
|
23
|
68
|
68
|
||||||||||||
Net income attributable to common shareholders
|
$
|
2,943
|
$
|
240
|
$
|
10,166
|
$
|
253
|
||||||||
Per share amount
|
$
|
0.17
|
$
|
0.02
|
$
|
0.58
|
$
|
0.02
|
||||||||
Diluted:
|
||||||||||||||||
Weighted average shares outstanding
|
17,394
|
14,600
|
17,402
|
14,529
|
||||||||||||
Assumed conversion of convertible
preferred stock
|
840
|
840
|
840
|
840
|
||||||||||||
Total dilutive shares
|
18,234
|
15,440
|
18,242
|
15,369
|
||||||||||||
Net income attributable to
common shareholders
|
$
|
2,943
|
$
|
240
|
$
|
10,166
|
$
|
253
|
||||||||
Convertible preferred stock dividend
|
23
|
23
|
68
|
68
|
||||||||||||
Net income attributable to DXP Enterprises, Inc. for diluted
earnings per share
|
$
|
2,966
|
$
|
263
|
$
|
10,234
|
$
|
321
|
||||||||
Per share amount
|
$
|
0.16
|
$
|
0.02
|
$
|
0.56
|
$
|
0.02
|
For the Three Months Ended September 30,
|
||||||||||||||||||||||||||||||||
2017
|
2016
|
|||||||||||||||||||||||||||||||
SC
|
IPS
|
SCS
|
Total
|
SC
|
IPS
|
SCS
|
Total
|
|||||||||||||||||||||||||
Sales
|
$
|
160,863
|
$
|
51,027
|
$
|
40,040
|
$
|
251,930
|
$
|
152,018
|
$
|
39,830
|
$
|
38,177
|
$
|
230,025
|
||||||||||||||||
Amortization
|
2,262
|
1,803
|
271
|
4,336
|
2,292
|
1,956
|
271
|
4,519
|
||||||||||||||||||||||||
Income (loss) from operations
|
13,288
|
35
|
3,711
|
17,034
|
11,053
|
(326
|
)
|
3,658
|
14,385
|
|||||||||||||||||||||||
Income from operations,
excluding amortization
|
$
|
15,550
|
$
|
1,838
|
$
|
3,982
|
$
|
21,370
|
$
|
13,345
|
$
|
1,630
|
$
|
3,929
|
$
|
18,904
|
For the Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||||
2017
|
2016
|
|||||||||||||||||||||||||||||||
SC
|
IPS
|
SCS
|
Total
|
SC
|
IPS
|
SCS
|
Total
|
|||||||||||||||||||||||||
Sales
|
$
|
474,324
|
$
|
144,555
|
$
|
122,276
|
$
|
741,155
|
$
|
481,352
|
$
|
141,614
|
$
|
116,835
|
$
|
739,801
|
||||||||||||||||
Amortization
|
6,738
|
5,393
|
812
|
12,943
|
6,871
|
5,874
|
812
|
13,557
|
||||||||||||||||||||||||
Income from operations
|
40,570
|
1,710
|
10,946
|
53,226
|
28,608
|
1,549
|
10,799
|
40,956
|
||||||||||||||||||||||||
Income from operations,
excluding amortization
|
$
|
47,308
|
$
|
7,103
|
$
|
11,758
|
$
|
66,169
|
$
|
35,479
|
$
|
7,423
|
$
|
11,611
|
$
|
54,513
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Operating income for reportable segments, excluding amortization
|
$
|
21,370
|
$
|
18,904
|
$
|
66,169
|
$
|
54,513
|
||||||||
Adjustment for:
|
||||||||||||||||
Amortization of intangible assets
|
4,336
|
4,519
|
12,943
|
13,557
|
||||||||||||
Corporate expense
|
10,524
|
9,452
|
28,223
|
29,176
|
||||||||||||
Income from operations
|
6,510
|
4,933
|
25,003
|
11,780
|
||||||||||||
Interest expense
|
4,928
|
4,338
|
12,573
|
11,698
|
||||||||||||
Other income, net
|
(153
|
)
|
(251
|
)
|
(324
|
)
|
(397
|
)
|
||||||||
Income before income taxes
|
$
|
1,735
|
$
|
846
|
$
|
12,754
|
$
|
479
|
Three Months Ended September 30,
|
Nine Months September 30,
|
|||||||||||||||||||||||||||||||
2017
|
%
|
2016
|
%
|
2017
|
%
|
2016
|
%
|
|||||||||||||||||||||||||
Sales
|
$
|
251,930
|
100.0
|
%
|
$
|
230,025
|
100.0
|
%
|
$
|
741,155
|
100.0
|
%
|
$
|
739,801
|
100.0
|
%
|
||||||||||||||||
Cost of sales
|
184,967
|
73.4
|
%
|
166,205
|
72.3
|
%
|
540,741
|
73.0
|
%
|
535,560
|
72.4
|
%
|
||||||||||||||||||||
Gross profit
|
66,963
|
26.6
|
%
|
63,820
|
27.7
|
%
|
200,414
|
27.0
|
%
|
204,241
|
27.6
|
%
|
||||||||||||||||||||
Selling, general and administrative expense
|
60,453
|
24.0
|
%
|
58,887
|
25.6
|
%
|
175,411
|
23.7
|
%
|
192,461
|
26.0
|
%
|
||||||||||||||||||||
Income from operations
|
6,510
|
2.6
|
%
|
4,933
|
2.1
|
%
|
25,003
|
3.4
|
%
|
11,780
|
1.6
|
%
|
||||||||||||||||||||
Other income, net
|
(153
|
)
|
-0.1
|
%
|
(251
|
)
|
-0.1
|
%
|
(324
|
)
|
0.0
|
%
|
(397
|
)
|
-0.1
|
%
|
||||||||||||||||
Interest expense
|
4,928
|
2.0
|
%
|
4,338
|
1.9
|
%
|
12,573
|
1.7
|
%
|
11,698
|
1.6
|
%
|
||||||||||||||||||||
Income before taxes
|
1,735
|
0.7
|
%
|
846
|
0.4
|
%
|
12,754
|
1.7
|
%
|
479
|
0.1
|
%
|
||||||||||||||||||||
Provision(benefit) for income taxes
|
(1,176
|
)
|
-0.4
|
%
|
664
|
0.3
|
%
|
2,880
|
0.4
|
%
|
459
|
0.1
|
%
|
|||||||||||||||||||
Net income
|
2,911
|
1.2
|
%
|
182
|
0.0
|
%
|
9,874
|
1.3
|
%
|
20
|
0.0
|
%
|
||||||||||||||||||||
Net loss attributable to noncontrolling interest
|
(55
|
)
|
0.0
|
%
|
(81
|
)
|
0.0
|
%
|
(360
|
)
|
0.0
|
%
|
(301
|
)
|
0.0
|
%
|
||||||||||||||||
Net income attributable to DXP Enterprises, Inc.
|
$
|
2,966
|
1.2
|
%
|
$
|
263
|
0.1
|
%
|
$
|
10,234
|
1.4
|
%
|
$
|
321
|
0.0
|
%
|
||||||||||||||||
Per share amounts attributable to DXP Enterprises, Inc.
|
||||||||||||||||||||||||||||||||
Basic earnings per share
|
$
|
0.17
|
$
|
0.02
|
$
|
0.58
|
$
|
0.02
|
||||||||||||||||||||||||
Diluted earnings per share
|
$
|
0.16
|
$
|
0.02
|
$
|
0.56
|
$
|
0.02
|
Fiscal Quarter
|
Secured Leverage Ratio
|
December 31, 2017
|
5.75:1.00
|
March 31, 2018
|
5.75:1.00
|
June 30, 2018
|
5.50:1.00
|
September 30, 2018
|
5.50:1.00
|
December 31, 2018
|
5.25:1.00
|
March 31, 2019
|
5.25:1.00
|
June 30, 2019
|
5.00:1.00
|
September 30, 2019
|
5.00:1.00
|
December 31, 2019
|
4.75:1.00
|
March 31, 2020
|
4.75:1.00
|
June 30, 2020 and each Fiscal Quarter thereafter
|
4.50:1.00
|
September 30, 2017
|
December 31, 2016
|
Increase (Decrease)
|
||||||||||
Current maturities of long-term debt, less unamortized debt issuance costs
|
$
|
3,365
|
$
|
51,354
|
$
|
(47,989
|
)
|
|||||
Long-term debt
|
239,042
|
173,331
|
65,711
|
|||||||||
Total long-term debt
|
$
|
242,407
|
$
|
224,685
|
$
|
17,722
|
||||||
Amount available
(1)
|
$
|
81,010
|
$
|
37,347
|
$
|
43,663
|
||||||
(1)
Represents the amount available to be borrowed at the indicated date under the most restrictive covenant of the credit facility in effect at the indicated date. The increase in the amount available to be borrowed is primarily the result of the Company terminating its previously existing credit facility and replacing it with the Term Loan Agreement and the ABL Credit Agreement
.
|
Three Months Ended September 30,
|
|||
Increase
|
|||
2017
|
2016
|
(Decrease)
|
|
Days of sales outstanding
|
63.2
|
65.4
|
(2.2)
|
Inventory turns
|
8.5
|
6.7
|
1.8
|
·
|
Maintaining adequate documentation to support proper revenue recognition;
|
·
|
Capturing and accounting for all fixed price contracts;
|
·
|
Obtaining proper approvals for contract change orders;
|
·
|
Documenting approval of management bonuses in a timely manner;
|
·
|
Improperly recording proceeds from property and equipment disposals to cost of sales;
|
·
|
Improper recording of valuation accounts in purchase accounting;
|
·
|
Obtaining proper approvals for freight invoices;
|
·
|
Accounting for fully amortized intangible assets;
|
·
|
Improperly recording operating leases on a method other than straight line recognition; and
|
·
|
Improper access to payroll records.
|
·
|
We augmented our tax accounting resources by engaging third party professionals and hiring an experienced tax director to strengthen tax accounting review procedures in the United States and Canada.
|
·
|
We developed and implemented enhanced policies and procedures relating to tax account reconciliations and analysis.
|
·
|
We are implementing close procedures at interim periods to allow for more timely and increased oversight by our management of the calculation and reporting of certain tax balances.
|
·
|
We are reassessing the design of our tax review controls to identify areas where enhanced precision will help detect and prevent material misstatements.
|
·
|
In connection with the remediation of the material weakness in our control activities, we are enhancing our policies relating to the documentation, review and approval of account reconciliations.
|
·
|
To enhance our information technology controls, we are implementing systems and processes in order to create an effective segregation of duties, restrict user access to applications and improve output controls.
|
·
|
We are implementing procedures to enhance the level of communication and understanding of our accounting and internal control policies and procedures in an effort to remediate the material weakness in our monitoring efforts.
|
·
|
Engaged third party professionals and hired an experienced tax director to strengthen tax accounting review procedures in the United States and Canada.
|
·
|
Developed and implemented enhanced policies and procedures relating to tax account reconciliations and analysis.
|
·
|
Implemented close procedures at interim periods to allow for more timely and increased oversight by our management of the calculation and reporting of certain tax balances.
|
·
|
Reassessed the design of our tax review controls to identify areas where enhanced precision will help detect and prevent material misstatements.
|
3.1 |
Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8 (Reg. No. 333-61953), filed with Commission on August 20, 1998).
|
3.2 |
Bylaws (incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-4 (Reg. No. 333-10021), filed with the Commission on August 12, 1996).
|
3.3 |
Amendment No. 1 to Bylaws (incorporated by reference to Exhibit A to the Registrant's Current Report on Form 8-K, filed with the Commission on July 28, 2011 (file no. 000-71513)).
|
*10.1 |
Term Loan and Security Agreement Dated as of August 29, 2017 by and among DXP Enterprises, Inc., Borrower and the Other Persons Party hereto from time to time, as Guarantors, and Goldman Sachs Bank USA, as Administrative Agent and Certain Financial Institutions, as Lenders.
|
*10.2 |
Loan and Security Agreement Dated as of August 29, 2017 by and among DXP Enterprises, Inc., Pump-PMI, LLC, PMI Operating Company, LTD., PMI Investment, LLC, Integrated Flow Solutions, LLC, DXP Holdings, Inc., Best Holding, LLC, Best Equipment Service & Sales Company, LLC, B27 Holdings Corp., B27, LLC, B27 Resources, Inc. and Pumpworks 610, LLC as US Borrowers, DXP Canada Enterprises, LTD., Industrial Paramedic Services, LTD., HSE Integrated LTD., and National Process Equipment Inc., as Canadian Borrowers and the Other Persons Party hereto from time to time, as Guarantors, and Bank of America, N.A., as agent and Certain Financial Institutions as Lenders, Bank of America, N.A. as Sole Lead Arranger and Sole Bookrunner and BMO Capital Markets Corp., as Documentation Agent.
|
* 31.1 |
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended.
|
* 31.2 |
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended.
|
* 32.1 |
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
* 32.2 |
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101 |
Interactive Data Files
|
|
|
1 Year DXP Enterprises Chart |
1 Month DXP Enterprises Chart |
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