DXP Enterprises (DXPE) 10-Q 7 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 31, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	DXP ENTERPRISES INC
Entity Central Index Key	0001020710
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,607,385
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Sales	$ 333,318	$ 311,227	$ 644,543	$ 597,163
Cost of sales	241,331	226,111	468,356	435,602
Gross profit	91,987	85,116	176,187	161,561
Selling, general and administrative expenses	69,140	65,056	138,524	130,352
Income from operations	22,847	20,060	37,663	31,209
Other (income) expense, net	185	(1,416)	152	(1,438)
Interest expense	4,885	6,137	9,925	11,178
Income before income taxes	17,777	15,339	27,586	21,469
Provision for income taxes	4,427	3,776	7,049	5,412
Net income	13,350	11,563	20,537	16,057
Net (loss) income attributable to noncontrolling interest	(109)	1	(213)	(56)
Net income attributable to DXP Enterprises, Inc.	13,459	11,562	20,750	16,113
Preferred stock dividend	22	22	45	45
Net income attributable to common shareholders	13,437	11,540	20,705	16,068
Net income	13,350	11,563	20,537	16,057
Currency translation adjustments	(139)	(1,134)	563	(1,511)
Comprehensive income	$ 13,211	$ 10,429	$ 21,100	$ 14,546
Earnings per share :
Basic (in dollars per share)	$ 0.76	$ 0.66	$ 1.18	$ 0.92
Diluted (in dollars per share)	$ 0.73	$ 0.63	$ 1.13	$ 0.88
Weighted average common shares outstanding :
Basic (in shares)	17,596	17,558	17,581	17,538
Diluted (in shares)	18,436	18,398	18,421	18,378

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 25,429	$ 40,304
Restricted cash	124	215
Accounts Receivable, net of allowance for doubtful accounts of $9,587 and $10,126	210,257	191,829
Inventories	128,012	114,830
Costs and estimated profits in excess of billings	35,484	32,514
Prepaid expenses and other current assets	4,729	4,938
Federal income taxes receivable	593	960
Total current assets	404,628	385,590
Property and equipment, net	55,534	51,330
Goodwill	194,052	194,052
Other intangible assets, net	59,953	67,207
Operating lease ROU assets	69,094	0
Other long-term assets	3,346	1,783
Total assets	786,607	699,962
Current liabilities:
Current maturities of long-term debt	3,420	3,407
Trade accounts payable	89,293	87,407
Accrued wages and benefits	20,772	21,275
Customer advances	5,077	3,223
Billings in excess of costs and estimated profits	5,968	10,696
Short-term operating lease liabilities	17,887	0
Other current liabilities	15,904	17,269
Total current liabilities	158,321	143,277
Long-term debt, net of current maturities and unamortized debt issuance costs	236,202	236,979
Long-term operating lease liabilities	51,188	0
Other long-term liabilities	1,024	2,819
Deferred income taxes	9,662	8,633
Total long-term liabilities	298,076	248,431
Total liabilities	456,397	391,708
Commitments and contingencies (Note 11)
Shareholders' Equity:
Series A and B preferred stock, $1.00 par value each; 1,000,000 shares authorized each	16	16
Common stock, $0.01 par value, 100,000,000 shares authorized; 17,601,246 and 17,401,297 outstanding	174	174
Additional paid-in capital	157,091	156,190
Retained earnings	190,440	169,735
Accumulated other comprehensive loss	(18,704)	(19,267)
Total DXP Enterprises, Inc. Equity	329,017	306,848
Noncontrolling interest	1,193	1,406
Total Equity	330,210	308,254
Total liabilities and Equity	$ 786,607	$ 699,962

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Accounts receivable, allowance for doubtful accounts	$ 9,587	$ 10,126
Shareholders' Equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	17,601,246	17,401,297
Series A preferred stock
Shareholders' Equity:
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Series B preferred Stock
Shareholders' Equity:
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income attributable to DXP Enterprises, Inc.	$ 20,750	$ 16,113
Less: net loss attributable to non-controlling interest	(213)	(56)
Net income	20,537	16,057
Reconciliation of net income to net cash used in operating activities:
Depreciation	4,654	4,727
Amortization of intangible assets	7,617	8,477
Write-off of debt issuance costs	0	60
Gain on sale of property and equipment	(8)	(1,318)
Bad debt expense	(228)	1,715
Payment of contingent consideration liability in excess of acquisition-date fair value	(106)	0
Fair value adjustment on contingent consideration	66	0
Amortization of debt issuance costs	936	932
Stock compensation expense	1,029	1,497
Deferred income taxes	926	218
Changes in operating assets and liabilities
Trade accounts receivable	(17,402)	(14,469)
Costs and estimated profits in excess of billings	(2,953)	(11,051)
Inventories	(13,114)	(16,718)
Prepaid expenses and other assets	7,295	614
Trade accounts payable and accrued expenses	911	815
Billings in excess of costs and estimated profits	(4,774)	(1,150)
Other long-term liabilities	(8,846)	2,611
Net cash used in operating activities	(3,460)	(6,983)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(8,584)	(5,516)
Proceeds from the sale of property and equipment	34	2,700
Acquisition of business, net of cash acquired	0	(10,792)
Net cash used in investing activities	(8,550)	(13,608)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal debt payments	(1,700)	(1,688)
Debt issuance costs	0	(60)
Payment for contingent consideration liability	(1,394)	0
Dividends paid	(45)	(45)
Payment for employee taxes withheld from stock awards	(128)	(136)
Net cash used in financing activities	(3,267)	(1,929)
Effect of foreign currency on cash	311	(171)
Net change in cash and restricted cash	(14,966)	(22,691)
Cash and restricted cash at beginning of period	40,519	25,579
Cash and restricted cash at end of period	$ 25,553	$ 2,888

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Common stock	Paid-in capital	Retained earnings	Non controlling interest	Accum other comp loss	Series A preferred stock	Series B preferred stock
Beginning Balance at Dec. 31, 2017	$ 268,609	$ 174	$ 153,088	$ 134,254	$ 567	$ (19,490)	$ 1	$ 15
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred dividends paid	(45)			(45)
Compensation expense for restricted stock	1,497		1,497
Tax related items for share based awards	(136)		(136)
Issuance of shares of common stock	894		894
Currency translation adjustment	(1,511)					(1,511)
Net income	16,057			16,113	(56)
Ending Balance at Jun. 30, 2018	285,365	174	155,343	150,322	511	(21,001)	1	15
Beginning Balance at Mar. 31, 2018	274,279	174	154,664	138,782	510	(19,867)	1	15
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred dividends paid	(22)			(22)
Compensation expense for restricted stock	761		761
Tax related items for share based awards	(82)		(82)
Currency translation adjustment	(1,134)					(1,134)
Net income	11,563			11,562	1
Ending Balance at Jun. 30, 2018	285,365	174	155,343	150,322	511	(21,001)	1	15
Beginning Balance at Dec. 31, 2018	308,254	174	156,190	169,735	1,406	(19,267)	1	15
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred dividends paid	(45)			(45)
Compensation expense for restricted stock	1,029		1,029
Tax related items for share based awards	(128)		(128)
Issuance of shares of common stock	0
Currency translation adjustment	563					563
Net income	20,537			20,750	(213)
Ending Balance at Jun. 30, 2019	330,210	174	157,091	190,440	1,193	(18,704)	1	15
Beginning Balance at Mar. 31, 2019	316,581	174	156,651	177,003	1,302	(18,565)	1	15
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred dividends paid	(22)			(22)
Compensation expense for restricted stock	524		524
Tax related items for share based awards	(84)		(84)
Issuance of shares of common stock	0
Currency translation adjustment	(139)					(139)
Net income	13,350			13,459	(109)
Ending Balance at Jun. 30, 2019	$ 330,210	$ 174	$ 157,091	$ 190,440	$ 1,193	$ (18,704)	$ 1	$ 15

THE COMPANY

THE COMPANY	6 Months Ended
	Jun. 30, 2019
THE COMPANY [Abstract]
THE COMPANY	THE COMPANY DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") was incorporated in Texas on July 26, 1996. DXP Enterprises, Inc. and its subsidiaries are engaged in the business of distributing maintenance, repair and operating ("MRO") products, and service to energy and industrial customers. Additionally, DXP provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to energy and industrial customers. The Company is organized into three business segments: Service Centers ("SC"), Supply Chain Services ("SCS") and Innovative Pumping Solutions ("IPS"). See Note 12 - Segment Reporting for discussion of the business segments.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES	6 Months Ended
	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES Basis of Presentation The Company's financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its variable interest entity ("VIE"). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2018 . For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated annual report on Form 10-K filed with the Securities and Exchange Commission on March 8, 2019. The results of operations for three and six months ended June 30, 2019 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, these condensed consolidated financial statements contain all adjustments necessary to present fairly the Company's condensed consolidated statements of operations and comprehensive income for three and six months ended June 30, 2019 and June 30, 2018 , condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 , condensed consolidated statements of cash flows for the six months ended June 30, 2019 and June 30, 2018 , and condensed consolidated statement of equity for three and six months ended June 30, 2019 and June 30, 2018 . All such adjustments represent normal recurring items. All inter-company accounts and transactions have been eliminated upon consolidation.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements Leases. In February 2016, the Financial Accounting Standards Board's ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) as modified by subsequently issued ASUs 2018-01, 2018-10, 2018-11 and 2018-20. The Company adopted the standard effective January 1, 2019. We have elected to apply the current period transition approach as introduced by ASU 2018-11 for our transition at January 1, 2019 and we have elected to apply several of the practical expedients in conjunction with accounting policy elections. See Note 4 - Leases for further discussion. Accounting Pronouncements Not Yet Adopted Intangibles-Goodwill and Other . In August 2018, the FASB issued ASU No. 2018-15, Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract based on a consensus of the FASB’s Emerging Issues Task Force (EITF) that requires implementation costs incurred by customers in cloud computing arrangements (CCAs) to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC 350-40, “Intangibles-Goodwill and Other-Internal-Use Software”. The ASU does not affect the accounting by cloud service providers, other software vendors or customers’ accounting for software licensing arrangements. The ASU will require companies to recognize deferred implementation costs to expense over the ‘term of the hosting arrangement’. Under the ASU, the term of the hosting arrangement comprises the non-cancellable period of the CCA plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which exercise of the option is controlled by the vendor. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, and we will continue to assess the standard and make a determination later. Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13: Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the disclosure requirements. The new standard will not have an impact on our results of operations, but it will significantly modify our disclosures around fair value measurements. Financial Instruments – Credit Losses. In June 2016, the FASB issued ASU 2016-13: Financial Instruments – Credit Losses, which replaces the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses. The update is intended to provide financial statement users with more useful information about expected credit losses. The amended guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the effect, if any, that the guidance will have on the Company's Consolidated Financial Statements and related disclosures.

LEASES

LEASES	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
LEASES	LEASES In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) which was modified by subsequently issued ASUs 2018-01, 2018-10, 2018-11 and 2018-20. The update requires organizations that lease assets ("lessees") to recognize the assets and liabilities of the rights and obligations created by leases with terms of more than 12 months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee remains dependent on its classification as a finance or operating lease. The criteria for determining whether a lease is a finance or operating lease was not significantly changed by this ASU. The ASU also requires additional disclosure of the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. This pronouncement was effective for financial statements issued for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted. In July 2018, the FASB issued ASU No. 2018-11, Leases: Targeted Improvements (Topic 842). ASU 2018-11 provided additional relief in the comparative reporting requirements for initial adoption of ASC 842. Prior to ASU 2018-11, a modified retrospective transition was required for financing or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. ASU 2018-11 provided an additional transition method to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date (such as January 1, 2019, for calendar year-end public business entities) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. The Company adopted the standard effective January 1, 2019. We elected to apply the current period transition approach as introduced by ASU 2018-11 for our transition at January 1, 2019 and we elected to apply the following practical expedients and accounting policy decisions. We elected a package of transition expedients that allowed us to forgo reassessing certain conclusions reached under ASC 840 which must be elected together. All expedients in this package were applied together for all leases that commenced before the effective date, January 1, 2019, of ASC 842. As a result, in transitioning to ASC 842, for existing leases as of 1/1/2019, we continued to use judgments made under ASC 840 related to embedded leases, lease classification and accounting for initial direct costs. We generally have four classes of leased assets : Real Estate related properties (such as office space, warehouses, distribution centers and land), Automobiles, Office Equipment and Manufacturing Equipment and do not utilize finance leases. In addition, we have chosen, as an accounting policy election by class of underlying asset, not to separate nonlease components from the associated lease for all of our leased asset classes, except for Real Estate related leases. As a result, for classes of Automobiles, Office Equipment and Manufacturing Equipment, we account for each separate lease component and the nonlease components associated with that lease as a single lease component. For short-term leases as defined under ASC 842, we elected the short-term lease exception pursuant to ASC 842 to all classes of our leased assets. We do not recognize a lease liability or a right of use asset on our consolidated balance sheets for our leased assets with an original lease term of twelve months or less. Instead, we recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred and disclose in the notes to the consolidated financial statements our short-term lease expense. The new standard did have a material impact on our consolidated balance sheets related to recording right-of-use (ROU) assets and the corresponding lease liabilities for our inventory of operating leases. In January 2019, we recorded a ROU Asset and total lease liability obligations of approximately $72 million each. The new standard did not have a material impact on our consolidated statements of operations and had no impact on cash flows. We lease office space, warehouses, land, automobiles, and office and manufacturing equipment. All of our leases are classified as operating leases. Our leases have remaining lease terms of 1 month to 12 years, some of which include options to extend the leases for up to 14 years. The exercise of lease renewal options is at our sole discretion. Our lease agreements do not include options to purchase the leased property. The lease expenses were as follows (in thousands) : Three Months Ended June 30, Six Months Ended June 30, Lease cost Classification 2019 Short-term lease expense SG&A expenses (*) $ 291 $ 560 Other operating lease cost SG&A expenses (*) 6,044 11,877 Total operating lease cost $ 6,335 $ 12,437 (*) Manufacturing equipment and some vehicle rental expenses are included in the cost of sales. Supplemental cash flow information related to leases was as follows (in thousands) : Six Months Ended June 30, Lease 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,138 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ 5,740 Supplemental balance sheet information related to leases was as follows (in thousand) : Lease Classification June 30, 2019 March 31, 2019 Impact of ASC 842 Transition Assets Operating Operating lease right-of-use assets $ 69,094 $ 70,851 $ 72,679 Liabilities Current operating Short-term operating lease liabilities 17,887 17,661 18,762 Non-current operating Long-term operating lease liabilities 51,188 52,993 53,654 Total operating lease liabilities $ 69,075 $ 70,654 $ 72,416 Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments for lease commenced on or after January 1, 2019. We used our incremental borrowing rate as of the transition date of January 1, 2019 for operating leases that commenced prior to transition. Maturities of lease liabilities were as follows (in thousands) : Year Ending December 31, Operating leases (*) 2019 (excluding 6 months ended 6/30/2019) $ 11,577 2020 20,123 2021 16,813 2022 12,630 2023 7,580 Thereafter 13,464 Total lease payments $ 82,187 Less: imputed interest 13,112 Present value of lease liabilities $ 69,075 (*) Operating lease payments exclude $1.3 million of legally binding minimum lease payments for leases signed but not yet commenced. Contractual obligations related to operating leases as of December 31, 2018, under ASC 840 (in thousands) : Payments due by period Less than 1 year 1-3 years 3-5 years More than 5 years Total Operating lease obligations $ 22,096 $ 33,825 $ 18,379 $ 11,022 $ 85,322 Lease term and discount rate Six Months Ended June 30, Weighted average remaining lease term (years) Operating lease 5.17 Weighted average discount rate Operating lease 7.3% For the six months ended June 30, 2019 , the Company paid approximately $1.0 million in lease expenses to entities controlled by the Company's Chief Executive Officer, David Little and family.

FAIR VALUE OF FINANCIAL ASSETS

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES	FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Authoritative guidance for financial assets and liabilities measured on a recurring basis applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. Fair value, as defined in the authoritative guidance, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance affects the fair value measurement of an investment with quoted market prices in an active market for identical instruments, which must be classified in one of the following categories: Level 1 Inputs Level 1 inputs come from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs Level 2 inputs are other than quoted prices that are observable for an asset or liability. These inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. Level 3 Inputs Level 3 inputs are unobservable inputs for the asset or liability which require the Company's own assumptions. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Our acquisitions may include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent consideration include managements assumptions about the likelihood of payment based on the established benchmarks and discount rates based on an internal rate of return analysis. The fair value measurement includes inputs that are Level 3 classified as discussed above, as they are not observable in the market. Should actual results increase or decrease as compared to the assumption used in our analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Changes in the fair value of the contingent earn-out consideration are measured each reporting period and reflected in our results of operations. As of June 30, 2019 , we recorded a $2.9 million liability for contingent consideration associated with the acquisition of Application Specialties Inc. ("ASI") in other current and long-term liabilities. For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the six months ended June 30, 2019 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent Liability for Accrued Consideration (in thousands) Beginning balance at December 31, 2018 $ 4,319 Acquisitions and settlements Acquisitions — Settlements (1,500 ) Total remeasurement adjustments: Changes in fair value recorded in other (income) expense, net 66 *Ending Balance at June 30, 2019 $ 2,885 The amount of total losses for the quarter included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at June 30, 2019. $ 66 * Included in other current and long-term liabilities Quantitative Information about Level 3 Fair Value Measurements The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: (in thousands, unaudited) Fair value at June 30, 2019 Valuation Technique Significant Unobservable Inputs Contingent consideration: (ASI acquisition) $ 2,885 Discounted cash flow Annualized EBITDA and probability of achievement Sensitivity to Changes in Significant Unobservable Inputs As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisition of ASI are annualized earnings before interest, tax, deprecation and amortization ("EBITDA") forecasts developed by the Company's management and the probability of achievement of those EBITDA results. The discount rate used in the calculation was 7.3% . Significant increases (decreases) in these unobservable inputs in isolation would result in a significantly (lower) higher fair value measurement. Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheet at June 30, 2019 and December 31, 2018 , but which require disclosure of their fair values include: cash and cash equivalents, trade accounts receivable, trade accounts payable and accrued expenses, accrued payroll and related benefits, and the revolving line of credit and term loan debt under our syndicated credit agreement facility. The Company believes that the estimated fair value of such instruments at June 30, 2019 and December 31, 2018 approximates their carrying value as reported on the unaudited condensed consolidated balance sheets.

INVENTORIES

INVENTORIES	6 Months Ended
	Jun. 30, 2019
Inventory Disclosure [Abstract]
INVENTORIES	INVENTORIES The carrying values of inventories are as follows ( in thousands ): June 30, 2019 December 31, 2018 Finished goods $ 119,245 $ 110,182 Work in process 21,145 17,344 Obsolescence reserve (12,378 ) (12,696 ) Inventories $ 128,012 $ 114,830

COSTS AND ESTIMATED PROFITS ON

COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS	6 Months Ended
	Jun. 30, 2019
Contractors [Abstract]
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS	COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS Under our customized pump production contracts in our IPS segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. Our contract assets are presented as “cost and estimated profits in excess of billings” on our Condensed Consolidated Balance Sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities that are presented as “Billings in excess of costs and estimated profits” on our Condensed Consolidated Balance Sheets. Costs and estimated profits on uncompleted contracts and related amounts billed were as follows ( in thousands ): June 30, 2019 December 31, 2018 Costs incurred on uncompleted contracts $ 71,489 $ 53,595 Estimated profits, thereon 8,587 6,847 Total 80,076 60,442 Less: billings to date 50,547 38,662 Net $ 29,529 $ 21,780 Such amounts were included in the accompanying Condensed Consolidated Balance Sheets for June 30, 2019 and December 31, 2018 under the following captions ( in thousands ): June 30, 2019 December 31, 2018 Costs and estimated profits in excess of billings $ 35,484 $ 32,514 Billings in excess of costs and estimated profits (5,968 ) (10,696 ) Translation adjustment 13 (38 ) Net $ 29,529 $ 21,780 During the six months ended June 30, 2019 , $8.9 million of the balances that were previously classified as contract liabilities at the beginning of the period shipped. Contract assets and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Our effective tax rate from continuing operations was a tax expense of 25.6% for the six months ended June 30, 2019 compared to a tax expense of 25.2% for the six months ended June 30, 2018 . Compared to the U.S. statutory rate for the six months ended June 30, 2019 , the effective tax rate was increased by state taxes, foreign taxes and nondeductible expenses partially offset by research and development tax credits, foreign tax credits, other tax credits, and a favorable statutory tax rate change in a foreign jurisdiction. Compared to the U.S. statutory rate for the six months ended June 30, 2018 , the effective tax rate was increased by state taxes, foreign taxes and nondeductible expenses partially offset by research and development tax credits and other tax credits. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts would be classified as a component of income tax provision (benefit) in the financial statements consistent with the Company’s policy.

LONG-TERM DEBT

LONG-TERM DEBT	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
LONG-TERM DEBT	LONG-TERM DEBT The components of the Company's long-term debt consisted of the following ( in thousands ): June 30, 2019 December 31, 2018 Carrying Value (1) Fair Value Carrying Value (1) Fair Value ABL Revolver $ — $ — $ — $ — Term Loan B 245,625 249,309 246,875 245,949 Promissory note payable (2) 1,390 1,390 1,841 1,841 Total long-term debt 247,015 250,699 248,716 247,790 Less: current portion (3,420 ) (3,458 ) (3,407 ) (3,398 ) Long-term debt less current maturities $ 243,595 $ 247,241 $ 245,309 $ 244,392 (1) Carrying value amounts do not include unamortized debt issuance costs of $7.4 million and $8.3 million for June 30, 2019 and December 31, 2018 , respectively . (2) Note payable in monthly installments at 2.9% through January 2021, collateralized by equipment. The fair value measurements used by the Company are considered Level 2 inputs, as defined in the fair value hierarchy. The fair value estimates were based on quoted prices for identical or similar securities. The Company was in compliance with all financial covenants under the ABL Revolver and Term Loan B Agreements as of June 30, 2019 .

EARNINGS PER SHARE DATA

EARNINGS PER SHARE DATA	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
EARNINGS PER SHARE DATA	EARNINGS PER SHARE DATA Basic earnings per share is computed based on weighted average shares outstanding and excludes dilutive securities. Diluted earnings per share is computed including the impacts of all potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data ): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic: Weighted average shares outstanding 17,596 17,558 17,581 17,538 Net income attributable to DXP Enterprises, Inc. $ 13,459 $ 11,562 $ 20,750 $ 16,113 Convertible preferred stock dividend 22 22 45 45 Net income attributable to common shareholders $ 13,437 $ 11,540 $ 20,705 $ 16,068 Per share amount $ 0.76 $ 0.66 $ 1.18 $ 0.92 Diluted: Weighted average shares outstanding 17,596 17,558 17,581 17,538 Assumed conversion of convertible preferred stock 840 840 840 840 Total dilutive shares 18,436 18,398 18,421 18,378 Net income attributable to common shareholders $ 13,437 $ 11,540 $ 20,705 $ 16,068 Convertible preferred stock dividend 22 22 45 45 Net income attributable to DXP Enterprises, Inc. $ 13,459 $ 11,562 $ 20,750 $ 16,113 Per share amount $ 0.73 $ 0.63 $ 1.13 $ 0.88

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. While DXP is unable to predict the outcome of these lawsuits, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on DXP's consolidated financial position, cash flows, or results of operations.

SEGMENT REPORTING

SEGMENT REPORTING	6 Months Ended
	Jun. 30, 2019
Segment Reporting [Abstract]
SEGMENT REPORTING	SEGMENT REPORTING The Company's reportable business segments are: Service Centers, Innovative Pumping Solutions and Supply Chain Services. The Service Centers segment is engaged in providing maintenance, MRO products, equipment and integrated services, including logistics capabilities, to industrial customers. The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products and safety services categories. The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, remanufactures pumps and manufactures branded private label pumps. The Supply Chain Services segment provides a wide range of MRO products and manages all or part of a customer's supply chain, including warehouse and inventory management. The high degree of integration of the Company's operations necessitates the use of a substantial number of allocations and apportionments in the determination of business segment information. Sales are shown net of intersegment eliminations. The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ): Three Months Ended June 30, 2019 2018 SC IPS SCS Total SC IPS SCS Total Product sales (recognized at a point in time) $ 184,444 $ — $ 48,385 $ 232,829 $ 176,191 $ — $ 40,127 $ 216,318 Inventory management services (recognized over contract life) — — 3,927 $ 3,927 — — 3,267 $ 3,267 Staffing services (day-rate basis) 15,534 — — $ 15,534 17,385 — — $ 17,385 Customized pump production (recognized over time) — 81,028 — $ 81,028 — 74,257 — $ 74,257 Total Revenue $ 199,978 $ 81,028 $ 52,312 $ 333,318 $ 193,576 $ 74,257 $ 43,394 $ 311,227 Income from operations $ 23,230 $ 12,028 $ 3,784 $ 39,042 $ 21,933 $ 8,956 $ 4,255 $ 35,144 Six Months Ended June 30, 2019 2018 SC IPS SCS Total SC IPS SCS Total Product sales (recognized at a point in time) $ 356,112 $ — $ 94,770 $ 450,882 $ 336,734 $ — $ 79,830 $ 416,564 Inventory management services (recognized over contract life) — — 7,865 $ 7,865 — — 6,497 $ 6,497 Staffing services (day-rate basis) 30,045 — — $ 30,045 32,203 — — $ 32,203 Customized pump production (recognized over time) — 155,751 — $ 155,751 — 141,899 — $ 141,899 Total Revenue $ 386,157 $ 155,751 $ 102,635 $ 644,543 $ 368,937 $ 141,899 $ 86,327 $ 597,163 Income from operations $ 42,210 $ 18,827 $ 7,870 $ 68,907 37,762 15,338 8,309 $ 61,409 The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Operating income for reportable segments $ 39,042 $ 35,144 $ 68,907 $ 61,409 Adjustment for: Amortization of intangible assets 3,803 4,119 7,617 8,477 Corporate expenses 12,392 10,965 23,627 21,723 Income from operations $ 22,847 $ 20,060 37,663 31,209 Interest expense 4,885 6,137 9,925 11,178 Other income, net 185 (1,416 ) 152 (1,438 ) Income before income taxes $ 17,777 $ 15,339 $ 27,586 $ 21,469

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS We have evaluated subsequent events through the date the interim Condensed Consolidated Financial Statements were issued. There were no subsequent events that required recognition or disclosure unless elsewhere identified in this report.

RECENT ACCOUNTING PRONOUNCEME_2

RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The Company's financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its variable interest entity ("VIE"). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2018 . For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated annual report on Form 10-K filed with the Securities and Exchange Commission on March 8, 2019. The results of operations for three and six months ended June 30, 2019 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, these condensed consolidated financial statements contain all adjustments necessary to present fairly the Company's condensed consolidated statements of operations and comprehensive income for three and six months ended June 30, 2019 and June 30, 2018 , condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 , condensed consolidated statements of cash flows for the six months ended June 30, 2019 and June 30, 2018 , and condensed consolidated statement of equity for three and six months ended June 30, 2019 and June 30, 2018 . All such adjustments represent normal recurring items.
Consolidation	All inter-company accounts and transactions have been eliminated upon consolidation.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements Leases. In February 2016, the Financial Accounting Standards Board's ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) as modified by subsequently issued ASUs 2018-01, 2018-10, 2018-11 and 2018-20. The Company adopted the standard effective January 1, 2019. We have elected to apply the current period transition approach as introduced by ASU 2018-11 for our transition at January 1, 2019 and we have elected to apply several of the practical expedients in conjunction with accounting policy elections.
Accounting Pronouncements Not Yet Adopted	Accounting Pronouncements Not Yet Adopted Intangibles-Goodwill and Other . In August 2018, the FASB issued ASU No. 2018-15, Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract based on a consensus of the FASB’s Emerging Issues Task Force (EITF) that requires implementation costs incurred by customers in cloud computing arrangements (CCAs) to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC 350-40, “Intangibles-Goodwill and Other-Internal-Use Software”. The ASU does not affect the accounting by cloud service providers, other software vendors or customers’ accounting for software licensing arrangements. The ASU will require companies to recognize deferred implementation costs to expense over the ‘term of the hosting arrangement’. Under the ASU, the term of the hosting arrangement comprises the non-cancellable period of the CCA plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which exercise of the option is controlled by the vendor. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, and we will continue to assess the standard and make a determination later. Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13: Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the disclosure requirements. The new standard will not have an impact on our results of operations, but it will significantly modify our disclosures around fair value measurements. Financial Instruments – Credit Losses. In June 2016, the FASB issued ASU 2016-13: Financial Instruments – Credit Losses, which replaces the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses. The update is intended to provide financial statement users with more useful information about expected credit losses. The amended guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the effect, if any, that the guidance will have on the Company's Consolidated Financial Statements and related disclosures.
Leases	LEASES In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) which was modified by subsequently issued ASUs 2018-01, 2018-10, 2018-11 and 2018-20. The update requires organizations that lease assets ("lessees") to recognize the assets and liabilities of the rights and obligations created by leases with terms of more than 12 months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee remains dependent on its classification as a finance or operating lease. The criteria for determining whether a lease is a finance or operating lease was not significantly changed by this ASU. The ASU also requires additional disclosure of the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. This pronouncement was effective for financial statements issued for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted. In July 2018, the FASB issued ASU No. 2018-11, Leases: Targeted Improvements (Topic 842). ASU 2018-11 provided additional relief in the comparative reporting requirements for initial adoption of ASC 842. Prior to ASU 2018-11, a modified retrospective transition was required for financing or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. ASU 2018-11 provided an additional transition method to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date (such as January 1, 2019, for calendar year-end public business entities) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. The Company adopted the standard effective January 1, 2019. We elected to apply the current period transition approach as introduced by ASU 2018-11 for our transition at January 1, 2019 and we elected to apply the following practical expedients and accounting policy decisions. We elected a package of transition expedients that allowed us to forgo reassessing certain conclusions reached under ASC 840 which must be elected together. All expedients in this package were applied together for all leases that commenced before the effective date, January 1, 2019, of ASC 842. As a result, in transitioning to ASC 842, for existing leases as of 1/1/2019, we continued to use judgments made under ASC 840 related to embedded leases, lease classification and accounting for initial direct costs. We generally have four classes of leased assets : Real Estate related properties (such as office space, warehouses, distribution centers and land), Automobiles, Office Equipment and Manufacturing Equipment and do not utilize finance leases. In addition, we have chosen, as an accounting policy election by class of underlying asset, not to separate nonlease components from the associated lease for all of our leased asset classes, except for Real Estate related leases. As a result, for classes of Automobiles, Office Equipment and Manufacturing Equipment, we account for each separate lease component and the nonlease components associated with that lease as a single lease component. For short-term leases as defined under ASC 842, we elected the short-term lease exception pursuant to ASC 842 to all classes of our leased assets. We do not recognize a lease liability or a right of use asset on our consolidated balance sheets for our leased assets with an original lease term of twelve months or less. Instead, we recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred and disclose in the notes to the consolidated financial statements our short-term lease expense. The new standard did have a material impact on our consolidated balance sheets related to recording right-of-use (ROU) assets and the corresponding lease liabilities for our inventory of operating leases. In January 2019, we recorded a ROU Asset and total lease liability obligations of approximately $72 million each. The new standard did not have a material impact on our consolidated statements of operations and had no impact on cash flows. We lease office space, warehouses, land, automobiles, and office and manufacturing equipment. All of our leases are classified as operating leases. Our leases have remaining lease terms of 1 month to 12 years, some of which include options to extend the leases for up to 14 years. The exercise of lease renewal options is at our sole discretion. Our lease agreements do not include options to purchase the leased property.

LEASES (Tables)

LEASES (Tables)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Schedule of Lease Expenses, Supplemental Cash Flow and Balance Sheet Information and Lease Term and Discount Rate	Lease term and discount rate Six Months Ended June 30, Weighted average remaining lease term (years) Operating lease 5.17 Weighted average discount rate Operating lease 7.3% The lease expenses were as follows (in thousands) : Three Months Ended June 30, Six Months Ended June 30, Lease cost Classification 2019 Short-term lease expense SG&A expenses (*) $ 291 $ 560 Other operating lease cost SG&A expenses (*) 6,044 11,877 Total operating lease cost $ 6,335 $ 12,437 (*) Manufacturing equipment and some vehicle rental expenses are included in the cost of sales. Supplemental cash flow information related to leases was as follows (in thousands) : Six Months Ended June 30, Lease 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,138 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ 5,740
Schedule of Supplemental Balance Sheet Information	Supplemental balance sheet information related to leases was as follows (in thousand) : Lease Classification June 30, 2019 March 31, 2019 Impact of ASC 842 Transition Assets Operating Operating lease right-of-use assets $ 69,094 $ 70,851 $ 72,679 Liabilities Current operating Short-term operating lease liabilities 17,887 17,661 18,762 Non-current operating Long-term operating lease liabilities 51,188 52,993 53,654 Total operating lease liabilities $ 69,075 $ 70,654 $ 72,416 Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments for lease commenced on or after January 1, 2019. We used our incremental borrowing rate as of the transition date of January 1, 2019 for operating leases that commenced prior to transition.
Schedule of Maturity of Lease Liabilities	Maturities of lease liabilities were as follows (in thousands) : Year Ending December 31, Operating leases (*) 2019 (excluding 6 months ended 6/30/2019) $ 11,577 2020 20,123 2021 16,813 2022 12,630 2023 7,580 Thereafter 13,464 Total lease payments $ 82,187 Less: imputed interest 13,112 Present value of lease liabilities $ 69,075 (*) Operating lease payments exclude $1.3 million of legally binding minimum lease payments for leases signed but not yet commenced.
Schedule of Contractual Obligations Related to Operating Leases Under ASC 840	Contractual obligations related to operating leases as of December 31, 2018, under ASC 840 (in thousands) : Payments due by period Less than 1 year 1-3 years 3-5 years More than 5 years Total Operating lease obligations $ 22,096 $ 33,825 $ 18,379 $ 11,022 $ 85,322

FAIR VALUE OF FINANCIAL ASSET_2

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
Schedule of Reconciliation of the Beginning and Ending Balance and Gains or Losses Recognized	For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the six months ended June 30, 2019 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent Liability for Accrued Consideration (in thousands) Beginning balance at December 31, 2018 $ 4,319 Acquisitions and settlements Acquisitions — Settlements (1,500 ) Total remeasurement adjustments: Changes in fair value recorded in other (income) expense, net 66 *Ending Balance at June 30, 2019 $ 2,885 The amount of total losses for the quarter included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at June 30, 2019. $ 66 * Included in other current and long-term liabilities
Schedule of Quantitative Information About Level 3 Fair Value Measurements	The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: (in thousands, unaudited) Fair value at June 30, 2019 Valuation Technique Significant Unobservable Inputs Contingent consideration: (ASI acquisition) $ 2,885 Discounted cash flow Annualized EBITDA and probability of achievement

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2019
Inventory Disclosure [Abstract]
Schedule of Carrying Values of Inventories	The carrying values of inventories are as follows ( in thousands ): June 30, 2019 December 31, 2018 Finished goods $ 119,245 $ 110,182 Work in process 21,145 17,344 Obsolescence reserve (12,378 ) (12,696 ) Inventories $ 128,012 $ 114,830

COSTS AND ESTIMATED PROFITS O_2

COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS (Tables)	6 Months Ended
	Jun. 30, 2019
Contractors [Abstract]
Schedule of Costs and Estimated Profits on Uncompleted Contracts	Costs and estimated profits on uncompleted contracts and related amounts billed were as follows ( in thousands ): June 30, 2019 December 31, 2018 Costs incurred on uncompleted contracts $ 71,489 $ 53,595 Estimated profits, thereon 8,587 6,847 Total 80,076 60,442 Less: billings to date 50,547 38,662 Net $ 29,529 $ 21,780
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets	Such amounts were included in the accompanying Condensed Consolidated Balance Sheets for June 30, 2019 and December 31, 2018 under the following captions ( in thousands ): June 30, 2019 December 31, 2018 Costs and estimated profits in excess of billings $ 35,484 $ 32,514 Billings in excess of costs and estimated profits (5,968 ) (10,696 ) Translation adjustment 13 (38 ) Net $ 29,529 $ 21,780

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Schedule of Components of Company's Long-term Debt	The components of the Company's long-term debt consisted of the following ( in thousands ): June 30, 2019 December 31, 2018 Carrying Value (1) Fair Value Carrying Value (1) Fair Value ABL Revolver $ — $ — $ — $ — Term Loan B 245,625 249,309 246,875 245,949 Promissory note payable (2) 1,390 1,390 1,841 1,841 Total long-term debt 247,015 250,699 248,716 247,790 Less: current portion (3,420 ) (3,458 ) (3,407 ) (3,398 ) Long-term debt less current maturities $ 243,595 $ 247,241 $ 245,309 $ 244,392 (1) Carrying value amounts do not include unamortized debt issuance costs of $7.4 million and $8.3 million for June 30, 2019 and December 31, 2018 , respectively . (2) Note payable in monthly installments at 2.9% through January 2021, collateralized by equipment.

EARNINGS PER SHARE DATA (Tables

EARNINGS PER SHARE DATA (Tables)	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
Schedule of Computation of Basic and Diluted Earnings per Share	The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data ): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic: Weighted average shares outstanding 17,596 17,558 17,581 17,538 Net income attributable to DXP Enterprises, Inc. $ 13,459 $ 11,562 $ 20,750 $ 16,113 Convertible preferred stock dividend 22 22 45 45 Net income attributable to common shareholders $ 13,437 $ 11,540 $ 20,705 $ 16,068 Per share amount $ 0.76 $ 0.66 $ 1.18 $ 0.92 Diluted: Weighted average shares outstanding 17,596 17,558 17,581 17,538 Assumed conversion of convertible preferred stock 840 840 840 840 Total dilutive shares 18,436 18,398 18,421 18,378 Net income attributable to common shareholders $ 13,437 $ 11,540 $ 20,705 $ 16,068 Convertible preferred stock dividend 22 22 45 45 Net income attributable to DXP Enterprises, Inc. $ 13,459 $ 11,562 $ 20,750 $ 16,113 Per share amount $ 0.73 $ 0.63 $ 1.13 $ 0.88

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	6 Months Ended
	Jun. 30, 2019
Segment Reporting [Abstract]
Schedule of Financial Information Regarding Company's Segments	The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ): Three Months Ended June 30, 2019 2018 SC IPS SCS Total SC IPS SCS Total Product sales (recognized at a point in time) $ 184,444 $ — $ 48,385 $ 232,829 $ 176,191 $ — $ 40,127 $ 216,318 Inventory management services (recognized over contract life) — — 3,927 $ 3,927 — — 3,267 $ 3,267 Staffing services (day-rate basis) 15,534 — — $ 15,534 17,385 — — $ 17,385 Customized pump production (recognized over time) — 81,028 — $ 81,028 — 74,257 — $ 74,257 Total Revenue $ 199,978 $ 81,028 $ 52,312 $ 333,318 $ 193,576 $ 74,257 $ 43,394 $ 311,227 Income from operations $ 23,230 $ 12,028 $ 3,784 $ 39,042 $ 21,933 $ 8,956 $ 4,255 $ 35,144 Six Months Ended June 30, 2019 2018 SC IPS SCS Total SC IPS SCS Total Product sales (recognized at a point in time) $ 356,112 $ — $ 94,770 $ 450,882 $ 336,734 $ — $ 79,830 $ 416,564 Inventory management services (recognized over contract life) — — 7,865 $ 7,865 — — 6,497 $ 6,497 Staffing services (day-rate basis) 30,045 — — $ 30,045 32,203 — — $ 32,203 Customized pump production (recognized over time) — 155,751 — $ 155,751 — 141,899 — $ 141,899 Total Revenue $ 386,157 $ 155,751 $ 102,635 $ 644,543 $ 368,937 $ 141,899 $ 86,327 $ 597,163 Income from operations $ 42,210 $ 18,827 $ 7,870 $ 68,907 37,762 15,338 8,309 $ 61,409
Schedule of Reconciliation of Operating Income for Reportable Segments to Consolidated Income Before Taxes	The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Operating income for reportable segments $ 39,042 $ 35,144 $ 68,907 $ 61,409 Adjustment for: Amortization of intangible assets 3,803 4,119 7,617 8,477 Corporate expenses 12,392 10,965 23,627 21,723 Income from operations $ 22,847 $ 20,060 37,663 31,209 Interest expense 4,885 6,137 9,925 11,178 Other income, net 185 (1,416 ) 152 (1,438 ) Income before income taxes $ 17,777 $ 15,339 $ 27,586 $ 21,469
Schedule of Company's Identifiable Assets by Segments	The Company's identifiable assets by segments are as follows (in thousands) : As of June 30, 2019 As of December 31, 2018 Service Centers $ 456,310 $ 402,944 Innovative Pumping Solutions 227,085 188,765 Supply Chain Services 61,835 53,517 Total Identifiable Assets $ 745,230 $ 645,226

THE COMPANY (Details)

THE COMPANY (Details)	6 Months Ended
	Jun. 30, 2019segment
THE COMPANY [Abstract]
Number of business segments	3

LEASES - Narrative (Details)

LEASES - Narrative (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)asset_class	Mar. 31, 2019USD ($)	Jan. 01, 2019USD ($)	Dec. 31, 2018USD ($)
Lessee, Lease, Description [Line Items]
Number of classes of leased assets-real estate properties | asset_class	4
Operating lease right-of-use assets	$ 69,094	$ 70,851	$ 72,679	$ 0
Operating lease liabilities	$ 69,075	$ 70,654	72,416
Remaining lease term	5 years 2 months 1 day
Lease extension period	14 years
Chief Executive Officer
Lessee, Lease, Description [Line Items]
Operating lease expense	$ 1,000
ASU 2016-02
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets			72,000
Operating lease liabilities			$ 72,000
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 month
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	12 years

LEASES - Lease Expense (Details

LEASES - Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Short-term lease expense	$ 291	$ 560
Other operating lease cost	6,044	11,877
Total operating lease cost	$ 6,335	$ 12,437

LEASES - Supplemental Cash Flow

LEASES - Supplemental Cash Flow Information (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 9,138
Right-of-use assets obtained in exchange for lease liabilities	$ 5,740

LEASES - Supplemental Balance S

LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Assets
Operating lease right-of-use assets	$ 69,094	$ 70,851	$ 72,679	$ 0
Liabilities
Short-term operating lease liabilities	17,887	17,661	18,762	0
Long-term operating lease liabilities	51,188	52,993	53,654	$ 0
Total operating lease liabilities	$ 69,075	$ 70,654	$ 72,416

LEASES - Maturity of Lease Liab

LEASES - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019	Jan. 01, 2019
Leases [Abstract]
2019 (excluding 6 months ended 6/30/2019)	$ 11,577
2020	20,123
2021	16,813
2022	12,630
2023	7,580
Thereafter	13,464
Total lease payments	82,187
Less: imputed interest	13,112
Present value of lease liabilities	69,075	$ 70,654	$ 72,416
Minimum lease payments for leases signed but not yet commenced	$ 1,300

LEASES - Contractual Obligation

LEASES - Contractual Obligations Related to Operating Leases Under ASC 840 (Details) $ in Thousands	Dec. 31, 2018USD ($)
Leases [Abstract]
Less than 1 year	$ 22,096
1-3 years	33,825
3-5 years	18,379
More than 5 years	11,022
Total	$ 85,322

LEASES - Lease Term and Discoun

LEASES - Lease Term and Discount Rate (Details)	Jun. 30, 2019
Leases [Abstract]
Weighted average remaining lease term, operating lease	5 years 2 months 1 day
Weighted average discount rate, operating lease	7.30%

FAIR VALUE OF FINANCIAL ASSET_3

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Narrative (Details) $ in Thousands	Jun. 30, 2019USD ($)
Discounted cash flow | Fair Value, Inputs, Level 3 | Annualized EBITDA and probability of achievement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	$ 2,885
Discount rate	0.073
ASI | Other Current and Long-term Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for contingent consideration	$ 2,900

FAIR VALUE OF FINANCIAL ASSET_4

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Reconciliation of Beginning and Ending Balances (Details) - Fair Value, Measurements, Recurring - Fair Value, Inputs, Level 3 - Contingent Consideration Liability $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)
Contingent Liability for Accrued Consideration
Beginning balance at December 31, 2018	$ 4,319
Acquisitions and settlements
Acquisitions	0
Settlements	(1,500)
Total remeasurement adjustments:
Changes in fair value recorded in other (income) expense, net	66
Ending Balance at June 30, 2019	2,885
The amount of total losses for the quarter included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at June 30, 2019.	$ 66

FAIR VALUE OF FINANCIAL ASSET_5

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Quantitative Information About Level 3 (Details) $ in Thousands	Jun. 30, 2019USD ($)
Fair Value, Inputs, Level 3 | Discounted cash flow | Annualized EBITDA and probability of achievement
Fair Value Measurement Inputs and Valuation Techniques [Abstract]
Contingent consideration: (ASI acquisition)	$ 2,885

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Finished goods	$ 119,245	$ 110,182
Work in process	21,145	17,344
Obsolescence reserve	(12,378)	(12,696)
Inventories	$ 128,012	$ 114,830

COSTS AND ESTIMATED PROFITS O_3

COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Schedule of costs and estimated earnings on uncompleted contracts [Abstract]
Costs incurred on uncompleted contracts	$ 71,489	$ 53,595
Estimated profits, thereon	8,587	6,847
Total	80,076	60,442
Less: billings to date	50,547	38,662
Net	29,529	21,780
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets [Abstract]
Costs and estimated profits in excess of billings	35,484	32,514
Billings in excess of costs and estimated profits	(5,968)	(10,696)
Translation adjustment	13	(38)
Net	29,529	$ 21,780
Balances previously classified as contract liabilities at the beginning of the period that have shipped	$ 8,900

INCOME TAXES (Details)

INCOME TAXES (Details)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate from continuing operations	25.60%	25.20%

LONG-TERM DEBT (Details)

LONG-TERM DEBT (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Borrowings [Abstract]
Less: current portion	$ (3,420)	$ (3,407)
Long-term debt less current maturities	236,202	236,979
Unamortized debt issuance costs	$ 7,400	$ 8,300
Promissory note payable
Borrowings [Abstract]
Interest rate	2.90%	2.90%
Carrying Value
Borrowings [Abstract]
Total long-term debt	$ 247,015	$ 248,716
Less: current portion	(3,420)	(3,407)
Long-term debt less current maturities	243,595	245,309
Carrying Value | ABL Revolver
Borrowings [Abstract]
Total long-term debt	0	0
Carrying Value | Term Loan B
Borrowings [Abstract]
Total long-term debt	245,625	246,875
Carrying Value | Promissory note payable
Borrowings [Abstract]
Total long-term debt	1,390	1,841
Fair Value
Borrowings [Abstract]
Total long-term debt	250,699	247,790
Less: current portion	(3,458)	(3,398)
Long-term debt less current maturities	247,241	244,392
Fair Value | ABL Revolver
Borrowings [Abstract]
Total long-term debt	0	0
Fair Value | Term Loan B
Borrowings [Abstract]
Total long-term debt	249,309	245,949
Fair Value | Promissory note payable
Borrowings [Abstract]
Total long-term debt	$ 1,390	$ 1,841

EARNINGS PER SHARE DATA (Detail

EARNINGS PER SHARE DATA (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Basic:
Weighted average shares outstanding (in shares)	17,596	17,558	17,581	17,538
Net income attributable to DXP Enterprises, Inc.	$ 13,459	$ 11,562	$ 20,750	$ 16,113
Convertible preferred stock dividend	22	22	45	45
Net income attributable to common shareholders	$ 13,437	$ 11,540	$ 20,705	$ 16,068
Per share amount (in dollars per share)	$ 0.76	$ 0.66	$ 1.18	$ 0.92
Diluted:
Weighted average shares outstanding (in shares)	17,596	17,558	17,581	17,538
Assumed conversion of convertible preferred stock (in shares)	840	840	840	840
Total dilutive shares (in shares)	18,436	18,398	18,421	18,378
Net income attributable to common shareholders	$ 13,437	$ 11,540	$ 20,705	$ 16,068
Net income attributable to DXP Enterprises, Inc.	$ 13,459	$ 11,562	$ 20,750	$ 16,113
Per share amount (in dollars per share)	$ 0.73	$ 0.63	$ 1.13	$ 0.88

SEGMENT REPORTING - Financial I

SEGMENT REPORTING - Financial Information of Company's Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	$ 333,318	$ 311,227	$ 644,543	$ 597,163
Income from operations	39,042	35,144	68,907	61,409
Product Sales | Fixed-price Contract | Transferred at Point in Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	232,829	216,318	450,882	416,564
Inventory Management Services | Fixed-price Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	3,927	3,267	7,865	6,497
Staffing Services | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	15,534	17,385	30,045	32,203
Customized Pump Production | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	81,028	74,257	155,751	141,899
SC
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	199,978	193,576	386,157	368,937
Income from operations	23,230	21,933	42,210	37,762
SC | Product Sales | Fixed-price Contract | Transferred at Point in Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	184,444	176,191	356,112	336,734
SC | Inventory Management Services | Fixed-price Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	0	0	0	0
SC | Staffing Services | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	15,534	17,385	30,045	32,203
SC | Customized Pump Production | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	0	0	0	0
IPS
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	81,028	74,257	155,751	141,899
Income from operations	12,028	8,956	18,827	15,338
IPS | Product Sales | Fixed-price Contract | Transferred at Point in Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	0	0	0	0
IPS | Inventory Management Services | Fixed-price Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	0	0	0	0
IPS | Staffing Services | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	0	0	0	0
IPS | Customized Pump Production | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	81,028	74,257	155,751	141,899
SCS
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	52,312	43,394	102,635	86,327
Income from operations	3,784	4,255	7,870	8,309
SCS | Product Sales | Fixed-price Contract | Transferred at Point in Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	48,385	40,127	94,770	79,830
SCS | Inventory Management Services | Fixed-price Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	3,927	3,267	7,865	6,497
SCS | Staffing Services | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	0	0	0	0
SCS | Customized Pump Production | Time-and-materials Contract | Transferred over Time
Segment Reporting Information, Profit (Loss) [Abstract]
Total Revenue	$ 0	$ 0	$ 0	$ 0

SEGMENT REPORTING - Reconciliat

SEGMENT REPORTING - Reconciliation of Operating Income to Consolidated Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Adjustment for:
Amortization of intangible assets			$ 7,617	$ 8,477
Income from operations	$ 22,847	$ 20,060	37,663	31,209
Interest expense	4,885	6,137	9,925	11,178
Other income, net	185	(1,416)	152	(1,438)
Income before income taxes	17,777	15,339	27,586	21,469
Operating Segments
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating income for reportable segments	39,042	35,144	68,907	61,409
Segment Reconciling Items
Adjustment for:
Amortization of intangible assets	3,803	4,119	7,617	8,477
Corporate
Adjustment for:
Corporate expenses	$ 12,392	$ 10,965	$ 23,627	$ 21,723

SEGMENT REPORTING - Identifiabl

SEGMENT REPORTING - Identifiable Assets by Segments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total Identifiable Assets	$ 745,230	$ 645,226
Corporate
Segment Reporting Information [Line Items]
Total Identifiable Assets	41,400	54,700
Service Centers
Segment Reporting Information [Line Items]
Total Identifiable Assets	456,310	402,944
Innovative Pumping Solutions
Segment Reporting Information [Line Items]
Total Identifiable Assets	227,085	188,765
Supply Chain Services
Segment Reporting Information [Line Items]
Total Identifiable Assets	$ 61,835	$ 53,517