[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 2018
|
[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.For the transition period fromto
|
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)
|
June 30, 2018
|
December 31, 2017
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
2,489
|
$
|
22,047
|
||||
Restricted cash
|
399
|
3,532
|
||||||
Trade accounts receivable, net of allowance for doubtful accounts of $11,037 in 2018 and $9,015 in 2017
|
185,261
|
167,272
|
||||||
Inventories
|
110,767
|
91,413
|
||||||
Costs and estimated profits in excess of billings
|
37,943
|
26,915
|
||||||
Prepaid expenses and other current assets
|
4,750
|
5,296
|
||||||
Federal income taxes receivable
|
986
|
1,440
|
||||||
Total current assets
|
342,595
|
317,915
|
||||||
Property and equipment, net
|
53,035
|
53,337
|
||||||
Goodwill
|
194,033
|
187,591
|
||||||
Other intangible assets, net
|
75,682
|
78,525
|
||||||
Other long-term assets
|
1,587
|
1,715
|
||||||
Total assets
|
$
|
666,932
|
$
|
639,083
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current maturities of long-term debt
|
$
|
3,394
|
$
|
3,381
|
||||
Trade accounts payable
|
95,013
|
80,303
|
||||||
Accrued wages and benefits
|
18,106
|
18,483
|
||||||
Customer advances
|
7,882
|
2,189
|
||||||
Billings in excess of costs and estimated profits
|
3,075
|
4,249
|
||||||
Other current liabilities
|
5,645
|
16,220
|
||||||
Total current liabilities
|
133,115
|
124,825
|
||||||
Long-term debt, less current maturities and unamortized debt issuance costs
|
237,875
|
238,643
|
||||||
Other long-term liabilities
|
2,611
|
-
|
||||||
Deferred income taxes
|
7,966
|
7,069
|
||||||
Total long-term liabilities
|
248,452
|
245,712
|
||||||
Total liabilities
|
381,567
|
370,537
|
||||||
Commitments and contingencies (
Note 13
)
|
||||||||
Equity:
|
||||||||
Series A preferred stock, $1.00 par value; 1,000,000 shares authorized; 1,122 shares issued and outstanding
|
1
|
1
|
||||||
Series B convertible preferred stock, $1.00 par value; 1,000,000 shares authorized; 15,000 shares issued and outstanding
|
15
|
15
|
||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; 17,567,912 at June 30, 2018 and 17,315,573 at December 31, 2017 shares issued
|
174
|
174
|
||||||
Additional paid-in capital
|
155,343
|
153,087
|
||||||
Retained earnings
|
150,322
|
134,193
|
||||||
Accumulated other comprehensive loss
|
(21,001
|
)
|
(19,491
|
)
|
||||
Total DXP Enterprises, Inc. equity
|
284,854
|
267,979
|
||||||
Noncontrolling interest
|
511
|
567
|
||||||
Total equity
|
285,365
|
268,546
|
||||||
Total liabilities and equity
|
$
|
666,932
|
$
|
639,083
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017 | |||||||||||||
Sales
|
$
|
311,227
|
$
|
250,698
|
$
|
597,163
|
$
|
489,225
|
||||||||
Cost of sales
|
226,111
|
181,762
|
435,602
|
355,774
|
||||||||||||
Gross profit
|
85,116
|
68,936
|
161,561
|
133,451
|
||||||||||||
Selling, general and
administrative expenses
|
65,056
|
58,679
|
130,352
|
114,958
|
||||||||||||
Income from operations
|
20,060
|
10,257
|
31,209
|
18,493
|
||||||||||||
Other (income) expense, net
|
(1,416
|
)
|
57
|
(1,438
|
)
|
(171
|
)
|
|||||||||
Interest expense
|
6,137
|
3,992
|
11,178
|
7,645
|
||||||||||||
Income before income taxes
|
15,339
|
6,208
|
21,469
|
11,019
|
||||||||||||
Provision for income taxes
|
3,776
|
2,239
|
5,412
|
4,056
|
||||||||||||
Net income
|
11,563
|
3,969
|
16,057
|
6,963
|
||||||||||||
Net income (loss) attributable to noncontrolling interest
|
1
|
(166
|
)
|
(56
|
)
|
(305
|
)
|
|||||||||
Net income attributable to DXP Enterprises, Inc.
|
11,562
|
4,135
|
16,113
|
7,268
|
||||||||||||
Preferred stock dividend
|
22
|
22
|
45
|
45
|
||||||||||||
Net income attributable to
common shareholders
|
$
|
11,540
|
$
|
4,113
|
$
|
16,068
|
$
|
7,223
|
||||||||
Net income
|
$
|
11,563
|
$
|
3,969
|
$
|
16,057
|
$
|
6,963
|
||||||||
Cumulative translation adjustment
|
(1,134
|
)
|
455
|
(1,511
|
)
|
(1,865
|
)
|
|||||||||
Comprehensive income
|
$
|
10,429
|
$
|
4,424
|
$
|
14,546
|
$
|
5,098
|
||||||||
Basic earnings per share
|
$
|
0.66
|
$
|
0.24
|
$
|
0.92
|
$
|
0.42
|
||||||||
Weighted average common
shares outstanding
|
17,558
|
17,404
|
17,538
|
17,406
|
||||||||||||
Diluted earnings per share
|
$
|
0.63
|
$
|
0.23
|
$
|
0.88
|
$
|
0.40
|
||||||||
Weighted average common
and common equivalent
shares outstanding - diluted
|
18,398
|
18,244
|
18,378
|
18,246
|
Six Months Ended
|
||||||||
June 30,
|
||||||||
2018
|
2017
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income attributable to DXP Enterprises, Inc.
|
$
|
16,113
|
$
|
7,268
|
||||
Less net loss attributable to non-controlling interest
|
(56
|
)
|
(305
|
)
|
||||
Net income
|
16,057
|
6,963
|
||||||
Reconciliation of net income to the net cash provided by (used in) operating activities:
|
||||||||
Gain on sale of building
|
(1,318
|
)
|
-
|
|||||
Depreciation
|
4,727
|
5,155
|
||||||
Amortization of intangible assets
|
8,477
|
8,607
|
||||||
Bad debt expense
|
1,715
|
1,001
|
||||||
Amortization of debt issuance costs
|
932
|
628
|
||||||
Write-off of debt issuance costs
|
60
|
-
|
||||||
Compensation expense for restricted stock
|
1,003
|
1,010
|
||||||
Stock compensation expense
|
494
|
|||||||
Deferred income taxes
|
218
|
1,998
|
||||||
Changes in operating assets and liabilities, net of
assets and liabilities acquired in business combinations: |
||||||||
Trade accounts receivable
|
(14,469
|
)
|
(11,768
|
)
|
||||
Costs and estimated profits in excess of billings
|
(11,051
|
)
|
(780
|
)
|
||||
Inventories
|
(16,718
|
)
|
(6,914
|
)
|
||||
Prepaid expenses and other assets
|
614
|
(1,923
|
)
|
|||||
Trade accounts payable and accrued expenses
|
815
|
3,979
|
||||||
Billings in excess of costs and estimated profits
|
(1,150
|
)
|
(102
|
)
|
||||
Other long-term liabilities
|
2,611
|
-
|
||||||
Net cash provided by (used in) operating activities
|
(6,983
|
)
|
7,854
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(5,516
|
)
|
(1,118
|
)
|
||||
Proceeds from the sale of fixed assets
|
2,700
|
-
|
||||||
Acquisitions of business, net of cash acquired
|
(10,792
|
)
|
-
|
|||||
Net cash used in investing activities
|
(13,608
|
)
|
(1,118
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from debt
|
-
|
394,966
|
||||||
Principal debt payments
|
(1,688
|
)
|
(399,641
|
)
|
||||
Debt issuance costs
|
(60
|
)
|
(380
|
)
|
||||
Loss for non-controlling interest owners, net of tax
|
-
|
(187
|
)
|
|||||
Dividends paid
|
(45
|
)
|
(45
|
)
|
||||
Payment for employee taxes withheld from stock awards
|
(136
|
)
|
(596
|
)
|
||||
Net cash used in financing activities
|
(1,929
|
)
|
(5,883
|
)
|
||||
EFFECT OF FOREIGN CURRENCY ON CASH
|
(171
|
)
|
36
|
|||||
NET CHANGE IN CASH
|
(22,691
|
)
|
889
|
|||||
CASH AT BEGINNING OF PERIOD
|
25,579
|
1,590
|
||||||
CASH AT END OF PERIOD
|
$
|
2,888
|
$
|
2,479
|
|
|
|
||||
(in thousands, unaudited)
|
Fair Value at June 30, 2018
|
Valuation Technique
|
Significant Unobservable
Inputs
|
|||
Contingent consideration:
(ASI acquisition)
|
$
|
4,006
|
Discounted cash flow
|
Annualized EBITDA and probability of achievement
|
June 30,
2018
|
December 31,
2017
|
|||||||
Finished goods
|
$
|
98,960
|
$
|
79,820
|
||||
Work in process
|
11,807
|
11,593
|
||||||
Inventories
|
$
|
110,767
|
$
|
91,413
|
June 30,
2018
|
December 31,
2017
|
|||||||
Costs incurred on uncompleted contracts
|
$
|
53,626
|
$
|
37,899
|
||||
Estimated profits, thereon
|
6,504
|
2,665
|
||||||
Total
|
60,130
|
40,564
|
||||||
Less: billings to date
|
25,265
|
17,881
|
||||||
Net
|
$
|
34,865
|
$
|
22,683
|
June 30,
2018
|
December 31, 2017
|
|||||||
Costs and estimated profits in excess
of billings
|
$
|
37,943
|
$
|
26,915
|
||||
Billings in excess of costs and estimated
profits
|
(3,075
|
)
|
(4,249
|
)
|
||||
Translation adjustment
|
(3
|
)
|
17
|
|||||
Net
|
$
|
34,865
|
$
|
22,683
|
Goodwill
|
Other
Intangible Assets
|
Total
|
||||||||||
Balance as of December 31, 2017
|
$
|
187,591
|
$
|
78,525
|
$
|
266,116
|
||||||
Acquired during the period
|
6,442
|
6,185
|
12,627
|
|||||||||
Translation adjustment
|
-
|
(551
|
)
|
(551
|
)
|
|||||||
Amortization
|
-
|
(8,477
|
)
|
(8,477
|
)
|
|||||||
Balance as of June 30, 2018
|
$
|
194,033
|
$
|
75,682
|
$
|
269,715
|
June 30,
2018
|
December 31,
2017
|
|||||||
Service Centers
|
$
|
160,914
|
$
|
154,473
|
||||
Innovative Pumping Solutions
|
15,980
|
15,980
|
||||||
Supply Chain Services
|
17,139
|
17,138
|
||||||
Total
|
$
|
194,033
|
$
|
187,591
|
June 30, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Carrying Amount, net
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Carrying Amount, net
|
|||||||||||||||||||
Customer relationships
|
$
|
168,255
|
$
|
(92,767
|
)
|
75,488
|
162,200
|
(83,806
|
)
|
78,394
|
||||||||||||||
Non-compete agreements
|
784
|
(590
|
)
|
194
|
949
|
(818
|
)
|
131
|
||||||||||||||||
Total
|
$
|
169,039
|
$
|
(93,357
|
)
|
$
|
75,682
|
$
|
163,149
|
$
|
(84,624
|
)
|
$
|
78,525
|
June 30, 2018
|
December 31, 2017
|
|||||||||||||||
Carrying Value*
|
Fair Value
|
Carrying Value*
|
Fair Value
|
|||||||||||||
ABL Revolver
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Term Loan B
|
248,125
|
249,519
|
249,375
|
251,869
|
||||||||||||
Promissory note due January 2021
|
2,284
|
2,284
|
2,722
|
2,722
|
||||||||||||
Total long-term debt
|
250,409
|
251,803
|
252,097
|
254,591
|
||||||||||||
Less: current portion
|
(3,394
|
)
|
(3,408
|
)
|
(3,381
|
)
|
(3,406
|
)
|
||||||||
Long-term debt less current maturities
|
$
|
247,015
|
$
|
248,395
|
$
|
248,716
|
$
|
251,185
|
June 30,
2018
|
December 31,
2017
|
|||||||
ABL Revolver
|
3.8
|
%
|
2.9
|
%
|
||||
Term Loan B
|
6.8
|
%
|
7.1
|
%
|
||||
Promissory Note
|
2.9
|
%
|
2.9
|
%
|
||||
Weighted average interest rate
|
6.8
|
%
|
7.0
|
%
|
Number of
Shares
|
Weighted Average
Grant Price
|
|||||||
Non-vested at December 31, 2017
|
77,901
|
$
|
30.36
|
|||||
Granted
|
124,474
|
$
|
31.54
|
|||||
Forfeited
|
(2,400
|
)
|
$
|
46.68
|
||||
Vested
|
(12,699
|
)
|
$
|
49.67
|
||||
Non-vested at June 30, 2018
|
187,276
|
$
|
29.63
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Basic:
|
||||||||||||||||
Weighted average shares outstanding
|
17,558
|
17,404
|
17,538
|
17,406
|
||||||||||||
Net income attributable to DXP Enterprises, Inc.
|
$
|
11,562
|
$
|
4,135
|
$
|
16,113
|
$
|
7,268
|
||||||||
Convertible preferred stock dividend
|
22
|
22
|
45
|
45
|
||||||||||||
Net income attributable to common shareholders
|
$
|
11,540
|
$
|
4,113
|
$
|
16,068
|
$
|
7,223
|
||||||||
Per share amount
|
$
|
0.66
|
$
|
0.24
|
$
|
0.92
|
$
|
0.42
|
||||||||
Diluted:
|
||||||||||||||||
Weighted average shares outstanding
|
17,558
|
17,404
|
17,538
|
17,406
|
||||||||||||
Assumed conversion of convertible
preferred stock
|
840
|
840
|
840
|
840
|
||||||||||||
Total dilutive shares
|
18,398
|
18,244
|
18,378
|
18,246
|
||||||||||||
Net income attributable to
common shareholders
|
$
|
11,540
|
$
|
4,113
|
$
|
16,068
|
$
|
7,223
|
||||||||
Convertible preferred stock dividend
|
22
|
22
|
45
|
45
|
||||||||||||
Net income attributable to DXP Enterprises, Inc. for diluted
earnings per share
|
$
|
11,562
|
$
|
4,135
|
$
|
16,113
|
$
|
7,268
|
||||||||
Per share amount
|
$
|
0.63
|
$
|
0.23
|
$
|
0.88
|
$
|
0.40
|
Purchase Price Consideration
|
Total Consideration
|
|||
|
(Dollars in thousands)
|
|||
Cash payments
|
$
|
10,792
|
||
Fair value of stock issued
|
894
|
|||
Present value of estimated fair value of contingent earn-out consideration
|
4,006
|
|||
Total purchase price consideration
|
$
|
15,692
|
Three Months Ended June 30,
|
||||||||||||||||||||||||||||||||
2018
|
2017
|
|||||||||||||||||||||||||||||||
SC
|
IPS
|
SCS
|
Total
|
SC
|
IPS
|
SCS
|
Total
|
|||||||||||||||||||||||||
Sales
|
$
|
193,576
|
$
|
74,257
|
$
|
43,394
|
$
|
311,227
|
$
|
164,749
|
$
|
44,470
|
$
|
41,479
|
$
|
250,698
|
||||||||||||||||
Amortization
|
2,310
|
1,538
|
271
|
4,119
|
2,227
|
1,793
|
271
|
4,291
|
||||||||||||||||||||||||
Income (loss) from operations
|
19,623
|
7,418
|
3,984
|
31,025
|
16,190
|
(38
|
)
|
3,447
|
19,599
|
|||||||||||||||||||||||
Income from operations,
excluding amortization
|
$
|
21,933
|
$
|
8,956
|
$
|
4,255
|
$
|
35,144
|
$
|
18,417
|
$
|
1,755
|
$
|
3,718
|
$
|
23,890
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||
2018
|
2017
|
|||||||||||||||||||||||||||||||
SC
|
IPS
|
SCS
|
Total
|
SC
|
IPS
|
SCS
|
Total
|
|||||||||||||||||||||||||
Sales
|
$
|
368,937
|
$
|
141,899
|
$
|
86,327
|
$
|
597,163
|
$
|
313,461
|
$
|
93,528
|
$
|
82,236
|
$
|
489,225
|
||||||||||||||||
Amortization
|
4,770
|
3,165
|
542
|
8,477
|
4,477
|
3,588
|
542
|
8,607
|
||||||||||||||||||||||||
Income from operations
|
32,992
|
12,173
|
7,767
|
52,932
|
27,281
|
1,676
|
7,234
|
36,191
|
||||||||||||||||||||||||
Income from operations,
excluding amortization
|
$
|
37,762
|
$
|
15,338
|
$
|
8,309
|
$
|
61,409
|
$
|
31,758
|
$
|
5,264
|
$
|
7,776
|
$
|
44,798
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Operating income for reportable segments
|
$
|
35,144
|
$
|
23,890
|
$
|
61,409
|
$
|
44,798
|
||||||||
Adjustment for:
|
||||||||||||||||
Amortization of intangible assets
|
4,119
|
4,291
|
8,477
|
8,607
|
||||||||||||
Corporate expenses
|
10,965
|
9,342
|
21,723
|
17,698
|
||||||||||||
Income from operations
|
20,060
|
10,257
|
31,209
|
18,493
|
||||||||||||
Interest expense
|
6,137
|
3,992
|
11,178
|
7,645
|
||||||||||||
Other (income) expense, net
|
(1,416
|
)
|
57
|
(1,438
|
)
|
(171
|
)
|
|||||||||
Income before income taxes
|
$
|
15,339
|
$
|
6,208
|
$
|
21,469
|
$
|
11,019
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||||||||||
2018
|
%
|
2017
|
%
|
2018
|
%
|
2017
|
%
|
|||||||||||||||||||||||||
Sales
|
$
|
311,227
|
100.0
|
%
|
$
|
250,698
|
100.0
|
%
|
$
|
597,163
|
100.0
|
%
|
$
|
489,225
|
100.0
|
%
|
||||||||||||||||
Cost of sales
|
226,111
|
72.7
|
%
|
181,762
|
72.5
|
%
|
435,602
|
72.9
|
%
|
355,774
|
72.7
|
%
|
||||||||||||||||||||
Gross profit
|
85,116
|
27.3
|
%
|
68,936
|
27.5
|
%
|
161,561
|
27.1
|
%
|
133,451
|
27.3
|
%
|
||||||||||||||||||||
Selling, general and administrative expenses
|
65,056
|
20.9
|
%
|
58,679
|
23.4
|
%
|
130,352
|
21.8
|
%
|
114,958
|
23.5
|
%
|
||||||||||||||||||||
Income from operations
|
20,060
|
6.4
|
%
|
10,257
|
4.1
|
%
|
31,209
|
5.2
|
%
|
18,493
|
3.8
|
%
|
||||||||||||||||||||
Other (income) expense, net
|
(1,416
|
)
|
-0.5
|
%
|
57
|
0.0
|
%
|
(1,438
|
)
|
-0.2
|
%
|
(171
|
)
|
0.0
|
%
|
|||||||||||||||||
Interest expense
|
6,137
|
2.0
|
%
|
3,992
|
1.6
|
%
|
11,178
|
1.9
|
%
|
7,645
|
1.6
|
%
|
||||||||||||||||||||
Income before taxes
|
15,339
|
4.9
|
%
|
6,208
|
2.5
|
%
|
21,469
|
3.6
|
%
|
11,019
|
2.2
|
%
|
||||||||||||||||||||
Provision for income taxes
|
3,776
|
1.2
|
%
|
2,239
|
0.9
|
%
|
5,412
|
0.9
|
%
|
4,056
|
0.8
|
%
|
||||||||||||||||||||
Net income
|
11,563
|
3.7
|
%
|
3,969
|
1.5
|
%
|
16,057
|
2.7
|
%
|
6,963
|
1.4
|
%
|
||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest
|
1
|
0.0
|
%
|
(166
|
)
|
0.0
|
%
|
(56
|
)
|
0.0
|
%
|
(305
|
)
|
-0.1
|
%
|
|||||||||||||||||
Net income attributable to DXP Enterprises, Inc.
|
$
|
11,562
|
3.7
|
%
|
$
|
4,135
|
1.6
|
%
|
$
|
16,113
|
2.7
|
%
|
$
|
7,268
|
1.5
|
%
|
||||||||||||||||
Per share amounts attributable to DXP Enterprises, Inc.
|
||||||||||||||||||||||||||||||||
Basic earnings per share
|
$
|
0.66
|
$
|
0.24
|
$
|
0.92
|
$
|
0.42
|
||||||||||||||||||||||||
Diluted earnings per share
|
$
|
0.63
|
$
|
0.23
|
$
|
0.88
|
$
|
0.40
|
Six Months Ended
June 30,
|
||||||||
Net Cash Provided by (Used in):
|
2018
|
2017
|
||||||
Operating Activities
|
$
|
(6,983
|
)
|
$
|
7,854
|
|||
Investing Activities
|
(13,608
|
)
|
(1,118
|
)
|
||||
Financing Activities
|
(1,929
|
)
|
(5,883
|
)
|
||||
Effect of Foreign Currency
|
(171
|
)
|
36
|
|||||
Net Change in Cash
|
$
|
(22,691
|
)
|
$
|
889
|
June 30,
2018
|
December 31, 2017
|
Increase (Decrease)
|
||||||||||
Current maturities of long-term debt
|
$
|
3,394
|
$
|
3,381
|
$
|
13
|
||||||
Long-term debt less unamortized debt issuance costs and current maturities
|
237,875
|
238,643
|
(768
|
)
|
||||||||
Total long-term debt
|
$
|
241,269
|
$
|
242,024
|
$
|
(755
|
)
|
|||||
Amount available
(1)
|
$
|
79,980
|
$
|
82,007
|
$
|
(2,027
|
)
|
|||||
(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.
|
Six Months Ended
June 30,
|
||||||||||
Increase
|
||||||||||
2018
|
2017
|
(Decrease)
|
||||||||
Days of sales outstanding
|
57.4
|
61.5
|
(4.1)
|
|||||||
Inventory turns
|
8.2
|
8.0
|
0.2
|
·
|
Management did not maintain effective management review controls over the monitoring and review of certain accounts.
|
·
|
Management did not effectively design, document nor monitor (review, evaluate and assess) the key internal control activities that provide the accounting information contained in the Company's consolidated financial statements.
|
·
|
In connection with the remediation of the material weakness in our control activities, we will enhance our policies relating to the design, documentation, review, monitoring and approval of management review controls and other key internal control activities that provide the accounting information contained in our consolidated financial statements.
|
·
|
To enhance our information technology controls, we will implement systems and processes in order to create an effective segregation of duties, restrict user access to applications and improve output controls.
|
3.1 |
Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8 (Reg. No. 333-61953), filed with the Commission on August 20, 1998).
|
3.2 |
Bylaws, as amended on July 27, 2011.
|
* 10.1 |
First Amendment to Loan Agreement, effective June 25, 2018.
|
* 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. |
I have reviewed this report on Form 10-Q of DXP Enterprises, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1. |
I have reviewed this report on Form 10-Q of DXP Enterprises, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.1
|
Section 1.1
of the Loan Agreement is hereby amended by inserting therein the following defined terms in their proper alphabetical position:
|
1.2
|
Section 1.1
of the Loan Agreement is hereby further amended by amending and restating clause (a) of the definition of "Applicable Margin" to read in its entirety as follows:
|
1.3
|
Section 5.7
of the Loan Agreement is hereby amended by amending and restating the first sentence of clause (c) thereof to read in its entirety as follows:
|
7.1
|
Captions
. Section captions used in this Agreement are for convenience only, and shall not affect the construction of this Agreement.
|
7.2
|
Governing Law
.
UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES.
|
7.3
|
Severability
. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Agreement shall remain in full force and effect.
|
7.4
|
Successors and Assigns
. This Agreement shall be binding upon and inure to the benefit of Borrower, Administrative Agent, Lenders (including the Assignee Lender), Secured Parties, and their respective successors and assigns, except that (a) no Obligor shall have the right to assign its rights or delegate its obligations under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with Section 14.3 of the Loan Agreement.
|
7.5
|
References
. Any reference to the Loan Agreement contained in any notice, request, certificate, or other document executed concurrently with or after the execution and delivery of this Agreement shall be deemed to include this Agreement unless the context shall otherwise require.
|
7.6
|
Loan Document
. This Agreement shall be deemed to be and shall constitute a Loan Document.
|
7.7
|
Continued Effectiveness
. Notwithstanding anything contained herein, the terms of this Agreement are not intended to and do not serve to effect a novation as to the Loan Agreement. The Loan Agreement and each of the Loan Documents remain in full force and effect.
|
7.8
|
Entire Agreement
. This constitute the entire agreement, and supersede all prior understandings and agreements, among the parties relating to the subject matter thereof.
|
7.9
|
Counterparts; Execution
. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of a signature page of this Agreement by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement. Any signature, contract formation or record-keeping through electronic means shall have the same legal validity and enforceability as manual or paper-based methods, to the fullest extent permitted by Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act.
|