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LONG-TERM DEBT
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
LONG-TERM DEBT LONG-TERM DEBT
Long-term debt consisted of the following (in thousands):
December 31,
 20232022
ABL Revolver$— $— 
Senior Secured Term Loan B due December 23, 2027(1)
— 428,133 
Senior Secured Term Loan B due October 13, 2030(2)
548,625 — 
Total debt
548,625 428,133 
Less: current maturities
(5,500)(4,369)
Total long-term debt
543,125 423,764 
Unamortized discount and debt issuance costs
22,428 14,559 
Long-term debt, net of unamortized discount and debt issuance costs
$520,697 $409,205 
(1) As of December 31, 2022 the fair value of the Term Loan B due December 23, 2027 was $411.0 million
(2) As of December 31, 2023 the fair value of the Term Loan B due October 13, 2030 was $554.1 million

Senior Secured Term Loan B:

On October 13, 2023, the Company entered into an amendment on its existing Senior Secured Term Loan B (the "Term Loan Amendment"), which provides for, among other things, an additional $125 million in new incremental commitments. The Term Loan Amendment refinanced the existing Senior Term Loan B and replaced it with a new Senior Secured Term Loan B with total borrowings of $550.0 million. The new Senior Secured Term Loan B amortizes in equal quarterly installments of 0.25%, with the remaining balance being payable on October 13, 2030, when the facility matures. Deferred financing costs associated with the Additional Term Loan Amendment were $11.7 million which were amortized to interest expense using the interest method during 2023. In connection with the Additional Term Loan Amendment the Company expensed third-party fees of $0.8 million and recognized a $1.2 million loss on debt extinguishment, which were included in interest expense during 2023. Quarterly interest payments accrue on outstanding borrowings under the new Senior Secured Term Loan B at a rate equal to Term SOFR (with a floor of 1.00%) plus 4.75%, or base rate plus 3.75%. The new Senior Secured Term Loan B is guaranteed by each of the Company’s direct and indirect material wholly owned subsidiaries, other than any of the Company’s Canadian subsidiaries and certain other excluded subsidiaries.

As of December 31, 2023 there was $548.6 million outstanding under the Senior Secured Term Loan B.

The interest rate for the Senior Secured Term Loan B was 10.44% and 9.95% as of December 31, 2023 and December 31, 2022, respectively.
ABL Revolver:

On July 19, 2022, the Company entered into an Amended and Restated Loan and Security Agreement (the “ABL Credit Agreement”) that provided for a $135.0 million asset-backed revolving line of credit (the "ABL Revolver"). Subject to the conditions set forth in the ABL Credit Agreement, the ABL Revolver may be increased in increments of $10.0 million up to an aggregate of $50.0 million. The ABL Revolver matures on July 19, 2027. Interest accrues on outstanding borrowings at a rate equal to SOFR plus a margin ranging from 1.25% to 1.75% per annum, or at an alternate base rate, Canadian prime rate or Canadian base rate plus a margin ranging from 0.25% to 0.75% per annum, in each case, based upon the average daily excess availability under the ABL Revolver for the most recently completed calendar quarter. Fees payable on the unused portion of the facility range from 0.25% to 0.375% per annum. At December 31, 2023 the unused line fee was 0.375% and there were no amounts outstanding under the ABL Revolver.

As of December 31, 2023, the borrowing availability under our credit facility was $132.1 million compared to $132.4 million at December 31, 2022, primarily as a result of outstanding letters of credit.
 
The interest rate for the ABL Revolver was 8.75% and 7.75% as of December 31, 2023 and December 31, 2022, respectively.

Financial Covenants:

The Company's principal financial covenants under the ABL Credit Agreement and Term Loan B Agreement include:
 
Fixed Charge Coverage Ratio – The Fixed Charge Coverage Ratio under the ABL Credit Agreement is defined as the ratio for the most recently completed four-fiscal quarter period, of (a) EBITDA minus capital expenditures (excluding those financed or funded with debt (other than the ABL Loans), (ii) the portion thereof funded with the net proceeds from asset dispositions of equipment or real property which the Company is permitted to reinvest pursuant to the Term Loan and the portion thereof funded with the net proceeds of casualty insurance or condemnation awards in respect of any equipment and real estate which DXP is not required to use to prepay the ABL Loans pursuant to the Term Loan B Agreement or with the proceeds of casualty insurance or condemnation awards in respect of any other property) minus cash taxes paid (net of cash tax refunds received during such period), to (b) fixed charges. The Company is restricted from allowing its fixed charge coverage ratio be less than 1.00 to 1.00 during a compliance period, which is triggered when the availability under the ABL Revolver falls below a threshold set forth in the ABL Credit Agreement. As of December 31, 2023, the Company's Fixed Charge Coverage Ratio was 2.69 to 1.00.
Secured Leverage Ratio – The Term Loan B Agreement requires that the Company’s Secured Leverage Ratio, defined as the ratio, as of the last day of any fiscal quarter of consolidated secured debt (net of unrestricted cash, not to exceed $200 million ) as of such day to EBITDA, beginning with the fiscal quarter ending December 31, 2023, is either equal to or less than as indicated in the table below:

Fiscal QuarterSecured Leverage Ratio
December 31, 2023
5.75:1.00
March 31, 2024
5.75:1.00
June 30, 2024
5.50:1.00
September 30, 2024
5.50:1.00
December 31, 2024
5.50:1.00
March 31, 2025
5.25:1.00
June 30, 2025
5.25:1.00
September 30, 2025
5.25:1.00
December 31, 2025
5.00:1.00
March 31, 2026
5.00:1.00
June 30, 2026 and thereafter
4.75:1.00
As of December 31, 2023, the Company’s Secured Leverage Ratio was 2.10 to 1.00.
EBITDA as defined under the Term Loan B Agreement for financial covenant purposes means, without duplication, for any period of determination, the sum of, consolidated net income during such period; plus to the extent deducted from consolidated net income in such period: (i) income tax expense, (ii) franchise tax expense, (iii) interest expense, (iv) amortization and depreciation during such period, (v) all non-cash charges and adjustments, and (vi) non-recurring cash expenses related to the Term Loan, provided, that if the Company acquires or disposes of any property during such period (other than under certain exceptions specified in the Term Loan B Agreement, including the sale of inventory in the ordinary course of business, then EBITDA shall be calculated, after giving pro forma effect to such acquisition or disposition, as if such acquisition or disposition had occurred on the first day of such period.

The Company was in compliance with all financial covenants as of December 31, 2023.

As of December 31, 2023, the maturities of long-term debt for the next five years and thereafter were as follows (in thousands):

Amount
2024$5,500 
20255,500 
20265,500 
20275,500 
20285,500 
Thereafter521,125 
Total$548,625