UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT
OF 1934
Date of
Report (date of earliest event reported): June
25, 2018
Commission file number 0-21513
DXP
Enterprises, Inc.
(Exact name of registrant as
specified in its charter)
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Texas |
76-0509661 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
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7272 Pinemont, Houston, Texas 77040 |
(713) 996-4700 |
| (Address of principal executive offices) | Registrant’s telephone number, including area code. |
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ⃞
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⃞
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On June 26, 2018, DXP Enterprises, Inc. (the “Company”) announced that on June 25, 2018 the Company successfully repriced its $248.8 million Term Loan B.
Under the amended term loan, the interest rate has been reduced by 75 basis points to LIBOR + 4.75 percent (the LIBOR floor of 1.00 percent is unchanged), from LIBOR + 5.50 percent, which is expected to generate annualized interest expense savings of approximately $1.9 million based on the current principal balance outstanding.
The Company expects full year 2018 interest expense to be favorably impacted by approximately $0.93 million, reflecting the benefit of a lower interest rate. This will be offset by one-time transaction fees and incremental and accelerated amortization of debt issuance costs.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
The following exhibit is included herein:
99.1 Press release dated June 26, 2018.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DXP ENTERPRISES, INC. |
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(Registrant) |
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By: |
/s/ Kent Yee |
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Kent Yee |
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Senior Vice President and Chief Financial Officer |
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By: |
/s/ Gene Padgett |
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Gene Padgett |
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Senior Vice President and Chief Accounting Officer |
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Dated: |
June 26, 2018 |
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INDEX TO EXHIBITS
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Exhibit No. |
Description |
Exhibit 99.1
DXP Enterprises Completes Debt Repricing Transaction; Reduces Annual Cash Interest Expense by Approximately $1.9 Million
HOUSTON--(BUSINESS WIRE)--June 26, 2018--DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that effective June 25, 2018, it has successfully repriced its $248.8 million Term Loan B.
Under the amended term loan, the interest rate has been reduced by 75 basis points to LIBOR + 4.75 percent (the LIBOR floor of 1.00 percent is unchanged), from LIBOR + 5.50 percent, which is expected to generate annualized interest expense savings of approximately $1.9 million based on the current principal balance outstanding.
“In-line with our commitment to further improving the financial strength of DXP, we are announcing the successful repricing of our term loan. We will continually explore opportunities to lower borrowing costs as we reduce the financial leverage within our capital structure. We appreciate our lenders’ continued support of DXP,” said Kent Yee, CFO of DXP Enterprises, Inc.
The Company expects full year 2018 interest expense to be favorably impacted by approximately $0.93 million, reflecting the benefit of a lower interest rate. This will be offset by one-time transaction fees and incremental and accelerated amortization of debt issuance costs.
Non-GAAP Financial Measures
DXP supplements reporting of net income with non-GAAP measurements, including EBITDA, Adjusted EBITDA and free cash flow. This supplemental information should not be considered in isolation or as a substitute for the unaudited GAAP measurements. Additional information regarding EBITDA and free cash flow referred to in this press release are included below under "--Unaudited Reconciliation of Non-GAAP Financial Information."
The Company believes EBITDA provides additional information about: (i) operating performance, because it assists in comparing the operating performance of the business, as it removes the impact of non-cash depreciation and amortization expense as well as items not directly resulting from core operations such as interest expense and income taxes and (ii) the performance and the effectiveness of operational strategies. Additionally, EBITDA performance is a component of a measure of the Company’s financial covenants under its credit facility. Furthermore, some investors use EBITDA as a supplemental measure to evaluate the overall operating performance of companies in the industry. Management believes that some investors’ understanding of performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing ongoing results of operations. By providing this non-GAAP financial measure, together with a reconciliation from net income, the Company believes it is enhancing investors’ understanding of the business and results of operations, as well as assisting investors in evaluating how well the Company is executing strategic initiatives.
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada, Mexico and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission.
CONTACT:
DXP Enterprises, Inc.
Kent Yee, 713-996-4700
Senior
Vice President, CFO
www.dxpe.com