Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 29, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | DXP ENTERPRISES INC | ||
Entity Central Index Key | 1,020,710 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 585,588,218 | ||
Entity Common Stock, Shares Outstanding | 14,415,961 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 1,693 | $ 47 |
Trade accounts receivable, net of allowances for doubtful accounts of $9,364 in 2015 and $8,713 in 2014 | 162,925 | 239,236 |
Inventories | 103,819 | 115,658 |
Costs and estimated profits in excess of billings on uncompleted contracts | 22,045 | 20,083 |
Prepaid expenses and other current assets | 2,644 | 3,004 |
Federal income taxes recoverable | 1,839 | 0 |
Deferred income taxes | 8,996 | 8,250 |
Total current assets | 303,961 | 386,278 |
Property and equipment, net | 68,503 | 69,979 |
Goodwill | 197,362 | 253,312 |
Other intangible assets, net of accumulated amortization of $87,594 in 2015 and $66,412 in 2014 | 112,297 | 130,333 |
Other long-term assets | 1,857 | 1,730 |
Total assets | 683,980 | 841,632 |
Current liabilities: | ||
Current maturities of long-term debt | 50,829 | 38,608 |
Trade accounts payable | 77,108 | 100,774 |
Accrued wages and benefits | 20,864 | 26,967 |
Federal income taxes payable | 0 | 8,130 |
Customer advances | 1,076 | 4,262 |
Billings in excess of costs and profits on uncompleted contracts | 8,021 | 8,840 |
Other current liabilities | 22,220 | 19,621 |
Total current liabilities | 180,118 | 207,202 |
Long-term debt, less current maturities | 300,726 | 372,908 |
Less unamortized debt issuance costs | (2,046) | (2,714) |
Long-term debt less unamortized debt issuance costs | 298,680 | 370,194 |
Non-current deferred income taxes | $ 6,312 | $ 21,284 |
Commitments and Contingencies (Note 13) | ||
Shareholders' equity: | ||
Common stock, $0.01 par value, 100,000,000 shares authorized; 14,655,356 in 2015 and 14,655,356 in 2014 shares issued | $ 146 | $ 146 |
Additional paid-in capital | 110,306 | 115,605 |
Retained earnings | 109,783 | 148,409 |
Accumulated other comprehensive (loss) income | (10,616) | (5,700) |
Treasury stock, at cost (264,297 shares at December 31, 2015 and 280,195 shares at December 31, 2014) | (12,577) | (15,524) |
Total DXP Enterprises, Inc. shareholder's' equity | 197,058 | 242,952 |
Noncontrolling interest | 1,812 | 0 |
Total shareholder's' equity | 198,870 | 242,952 |
Total liabilities and shareholder's' equity | 683,980 | 841,632 |
Series A Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | 1 | 1 |
Series B Convertible Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | $ 15 | $ 15 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Current assets: | ||
Trade accounts receivable, allowances for doubtful accounts | $ 9,364 | $ 8,713 |
Other intangible assets, accumulated amortization | $ 87,594 | $ 66,412 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 14,655,356 | 14,655,356 |
Treasury stock (in shares) | 264,297 | 280,195 |
Series A Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, voting rights | 1/10th vote per share | 1/10th vote per share |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, liquidation preference (in dollars per share) | $ 112 | $ 112 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 1,122 | 1,122 |
Preferred stock, outstanding (in shares) | 1,122 | 1,122 |
Series B Convertible Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, voting rights | 1/10th vote per share | 1/10th vote per share |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, stated value (in dollars per share) | 100 | 100 |
Preferred stock, liquidation preference (in dollars per share) | $ 1,500 | $ 1,500 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 15,000 | 15,000 |
Preferred stock, outstanding (in shares) | 15,000 | 15,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) [Abstract] | |||
Sales | $ 1,247,043 | $ 1,499,662 | $ 1,241,510 |
Cost of sales | 895,057 | 1,066,822 | 869,165 |
Gross profit | 351,986 | 432,840 | 372,345 |
Selling, general and administrative expense | 303,819 | 327,899 | 271,421 |
Impairment expense | 68,735 | 117,569 | 0 |
B27 settlement | 7,348 | 0 | 0 |
Operating income (loss) | (27,916) | (12,628) | 100,924 |
Other expense (income), net | 72 | 131 | (75) |
Interest expense | 10,932 | 12,797 | 6,282 |
Income (loss) before income taxes | (38,920) | (25,556) | 94,717 |
Provision for income taxes | 150 | 19,682 | 34,480 |
Net income (loss) | (39,070) | (45,238) | 60,237 |
Net income (loss) attributable to noncontrolling interest | (534) | 0 | 0 |
Net income (loss) attributable to DXP Enterprises, Inc. | (38,536) | (45,238) | 60,237 |
Preferred stock dividend | 90 | 90 | 90 |
Net income (loss) attributable to common shareholders | (38,626) | (45,328) | 60,147 |
Net income (loss) | (39,070) | (45,238) | 60,237 |
(Loss) gain on long-term investment, net of income taxes | 0 | (55) | (387) |
Cumulative translation adjustment, net of income taxes | (4,916) | (3,277) | (3,040) |
Comprehensive income (loss) | $ (43,986) | $ (48,570) | $ 56,810 |
Basic earnings (loss) per share (in dollars per share) | $ (2.68) | $ (3.10) | $ 4.17 |
Weighted average common shares outstanding (in shares) | 14,423 | 14,639 | 14,439 |
Diluted earnings (loss) per share (in dollars per share) | $ (2.68) | $ (3.10) | $ 3.94 |
Weighted average common shares and common equivalent shares outstanding (in shares) | 14,423 | 14,639 | 15,279 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Stock [Member] | Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | NCI [Member] | AOCI [Member] |
BALANCES at Dec. 31, 2012 | $ 208,493 | $ 1 | $ 15 | $ 141 | $ 78,554 | $ 133,590 | $ (4,867) | $ 0 | $ 1,059 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Dividends paid | (90) | 0 | 0 | 0 | 0 | (90) | 0 | 0 | 0 |
Issuance of common stock | 24,358 | 2 | 24,356 | ||||||
Compensation expense for restricted stock | 2,832 | 0 | 0 | 0 | 2,832 | 0 | 0 | 0 | 0 |
Net loss on sale of long-term investment for comprehensive income | (387) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (387) |
Issuance of shares in connection with an acquisitions | 3,518 | 0 | 0 | 1 | 3,517 | 0 | 0 | 0 | 0 |
Vesting of restricted stock | 633 | 0 | 0 | 0 | 633 | 0 | 0 | 0 | 0 |
Acquisition of treasury stock | (304) | 0 | 0 | 0 | 0 | 0 | (304) | 0 | 0 |
Cumulative translation adjustment | (3,040) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (3,040) |
Net income (loss) | 60,237 | 0 | 0 | 0 | 0 | 60,237 | 0 | 0 | 0 |
BALANCES at Dec. 31, 2013 | 296,250 | 1 | 15 | 144 | 109,892 | 193,737 | (5,171) | 0 | (2,368) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Dividends paid | (90) | 0 | 0 | 0 | 0 | (90) | 0 | 0 | 0 |
Compensation expense for restricted stock | 3,560 | 0 | 0 | 0 | 3,560 | 0 | 0 | 0 | 0 |
Net loss on sale of long-term investment for comprehensive income | (55) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (55) |
Issuance of shares in connection with an acquisitions | 4,033 | 0 | 0 | 2 | 4,031 | 0 | 0 | 0 | 0 |
Vesting of restricted stock | (376) | 0 | 0 | 0 | (376) | 0 | 0 | 0 | 0 |
Acquisition of treasury stock | (11,855) | 0 | 0 | 0 | 0 | 0 | (11,855) | 0 | 0 |
Issuance of treasury shares for vesting of restricted stock | 0 | 0 | 0 | 0 | (1,502) | 0 | 1,502 | 0 | 0 |
Cumulative translation adjustment | (3,277) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (3,277) |
Net income (loss) | (45,238) | 0 | 0 | 0 | 0 | (45,238) | 0 | 0 | 0 |
BALANCES at Dec. 31, 2014 | 242,952 | 1 | 15 | 146 | 115,605 | 148,409 | (15,524) | 0 | (5,700) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Dividends paid | (90) | 0 | 0 | 0 | 0 | (90) | 0 | 0 | 0 |
Compensation expense for restricted stock | 2,973 | 0 | 0 | 0 | 2,973 | 0 | 0 | 0 | 0 |
Issuance of shares in connection with an acquisitions | 4,398 | 0 | 0 | 0 | (4,825) | 0 | 9,223 | 0 | 0 |
Acquisition of treasury stock | (8,908) | 0 | 0 | 0 | 0 | 0 | (8,908) | 0 | 0 |
Issuance of treasury shares for vesting of restricted stock | (815) | 0 | 0 | 0 | (3,447) | 0 | 2,632 | 0 | 0 |
Noncontrolling interest | 2,346 | 0 | 0 | 0 | 0 | 0 | 0 | 2,346 | 0 |
Cumulative translation adjustment | (4,916) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (4,916) |
Net income (loss) | (39,070) | 0 | 0 | 0 | 0 | (38,536) | 0 | (534) | 0 |
BALANCES at Dec. 31, 2015 | $ 198,870 | $ 1 | $ 15 | $ 146 | $ 110,306 | $ 109,783 | $ (12,577) | $ 1,812 | $ (10,616) |
CONSOLIDATED STATEMENTS OF SHA6
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Issuance of shares in connection with acquisitions (in shares) | 148,769 | 36,000 | 52,542 |
Vesting of restricted stock for common stock (in shares) | 69,675 | 67,021 | |
Acquisition of treasury stock (in shares) | 191,420 | 200,000 | 5,400 |
Issuance of treasury shares for vesting of restricted stock (in shares) | 57,401 | 66,676 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (38,536) | $ (45,238) | $ 60,237 |
Less net income (loss) attributable to non-controlling interest | (534) | 0 | 0 |
Net income (loss) | (39,070) | (45,238) | 60,237 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation | 12,622 | 12,598 | 9,830 |
Amortization of intangible assets | 20,621 | 22,480 | 11,830 |
Impairment of goodwill | 68,735 | 117,569 | 0 |
Bad debt expense | 2,014 | 2,365 | 2,018 |
Amortization of debt issuance costs | 1,211 | 1,157 | 793 |
Gain on reversal of earn-out | 0 | 0 | (2,805) |
Compensation expense for restricted stock | 2,973 | 3,560 | 2,832 |
Tax benefit related to vesting of restricted stock | 0 | (960) | (958) |
Deferred income taxes | (9,024) | (12,122) | 2,834 |
Changes in operating assets and liabilities, net of assets and liabilities acquired in business acquisitions: | |||
Trade accounts receivable | 71,261 | (14,002) | (6,683) |
Cost in excess of billings on uncompleted contracts | (2,047) | (405) | 2,857 |
Inventories | 12,724 | (1,913) | 3,860 |
Prepaid expenses and other assets | 159 | 1,948 | 1,422 |
Accounts payable and accrued expenses | (43,677) | 11,099 | (6,380) |
Billings in excess of costs on uncompleted contracts | (513) | 2,359 | 511 |
Net cash provided by operating activities | 97,989 | 100,495 | 82,198 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (13,992) | (11,104) | (7,745) |
Sale of investments | 0 | 1,688 | (68) |
Acquisitions of businesses, net of cash acquired | (15,501) | (300,844) | (61,195) |
Net cash used in investing activities | (29,493) | (310,260) | (69,008) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from debt | 393,551 | 744,050 | 458,446 |
Principal payments on revolving line of credit and other long-term debt | (453,480) | (527,030) | (501,990) |
Debt issuance fees | (543) | (1,823) | 0 |
Contributions from non-controlling interest owners | 2,346 | 0 | 0 |
Preferred dividends paid | (90) | (90) | (90) |
Purchase of treasury stock | (8,908) | (11,855) | (304) |
Proceeds from issuance of common shares, net | 0 | 0 | 24,358 |
Tax benefit related to vesting of restricted stock | 0 | 960 | 958 |
Net cash provided by (used in) financing activities | (67,124) | 204,212 | (18,622) |
EFFECT OF FOREIGN CURRENCY ON CASH | 274 | 131 | 446 |
(DECREASE) INCREASE IN CASH | 1,646 | (5,422) | (4,986) |
CASH AT BEGINNING OF YEAR | 47 | 5,469 | 10,455 |
CASH AT END OF YEAR | 1,693 | 47 | 5,469 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for Interest | 9,721 | 11,641 | 5,489 |
Cash paid for Income Taxes | $ 13,792 | $ 28,784 | $ 35,697 |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS [Abstract] | |||
Exclusion of stock issued in connection with acquisitions | $ 4.4 | $ 4 | $ 3.6 |
THE COMPANY
THE COMPANY | 12 Months Ended |
Dec. 31, 2015 | |
THE COMPANY [Abstract] | |
THE COMPANY | NOTE 1 - THE COMPANY DXP Enterprises, Inc. together with its subsidiaries (collectively “DXP,” “Company,” “us,” “we,” or “our”) was incorporated in Texas on July 26, 1996, to be the successor to SEPCO Industries, Inc. DXP Enterprises, Inc. and its subsidiaries are engaged in the business of distributing maintenance, repair and operating (MRO) products, and service to industrial customers. Additionally, DXP provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to industrial customers. The Company is organized into three business segments: Service Centers, Supply Chain Services (SCS) and Innovative Pumping Solutions (IPS). See Note 17 for discussion of the business segments. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES Basis of Presentation The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”). The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its variable interest entity (“VIE”). DXP is the primary beneficiary of a VIE in which DXP owns 47.5% of the equity. DXP consolidates the financial statements of the VIE with the financial statements of DXP. As of December 31, 2015, the total assets of the VIE were approximately $4.0 million including $0.3 million of cash and approximately $3.6 million of fixed assets. DXP is the sole customer of the VIE. Consolidation of the VIE increased cost of sales by approximately $1.4 million for the twelve months ended December 31, 2015. The Company recognized a related income tax benefit of $0.3 million related to the VIE for the year ended December 31, 2015. At December 31, 2015, the owners of the 52.5% of the equity not owned by DXP included an executive officer and other employees of DXP. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation; none affected net income. Out-of-Period Items During the first quarter of 2015, we identified a $2.5 million ($1.6 million net of tax) overstatement of an accrual at December 31, 2014, which overstated 2014 selling, general and administrative expense. We recorded an out-of-period adjustment to correct this overstatement in the quarter ended March 31, 2015. During the fourth quarter of 2015, we realized $1.5 million of net tax benefits related to events which occurred in earlier years. These out-of-period items reduced the 2015 net loss by $3.1 million and 2015 basic and diluted net loss per share by $0.21. We assessed the materiality of this overstatement and concluded the overstatement was not material to the results of operations or financial condition for the years ended December 31, 2015 and 2014. Foreign Currency The financial statements of the Company’s Canadian subsidiaries are measured using local currencies as their functional currencies. Assets and liabilities are translated into U.S. dollars at current exchange rates, while income and expenses are translated at average exchange rates. Translation gains and losses are reported in other comprehensive income (loss). Gains and losses on transactions denominated in foreign currency are reported in consolidated statements of income (loss). Use of Estimates The preparation of financial statements in conformity with requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. Cash and Cash Equivalents The Company’s presentation of cash includes cash equivalents. Cash equivalents are defined as short-term investments with maturity dates of 90 days or less at time of purchase. The Company places its cash and cash equivalents with institutions with high credit quality. However, at certain times, such cash and cash equivalents may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Receivables and Credit Risk Trade receivables consist primarily of uncollateralized customer obligations due under normal trade terms, which usually require payment within 30 days of the invoice date. However, these payment terms are extended in select cases and customers may not pay within stated trade terms. The Company has trade receivables from a diversified customer base located primarily in the Rocky Mountain, Northeastern, Midwestern, Southeastern and Southwestern regions of the United States, and Canada. The Company believes no significant concentration of credit risk exists. The Company evaluates the creditworthiness of its customers' financial positions and monitors accounts on a regular basis, but generally does not require collateral. Provisions to the allowance for doubtful accounts are made monthly and adjustments are made periodically (as circumstances warrant) based upon management’s best estimate of the collectability of such accounts. The Company writes-off uncollectible trade accounts receivable when the accounts are determined to be uncollectible. No customer represents more than 10% of consolidated sales. We maintain an allowance for losses based upon the expected collectability of accounts receivable. Changes in this allowance for 2015, 2014 and 2013 were as follows: Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ 8,713 $ 8,798 $ 7,204 Charged to costs and expenses 2,014 2,365 2,018 Charged to other accounts 1,255 2 1,140 2 560 2 Deductions (2,618 ) 1 (3,590 ) 1 (984 ) 1 Balance at end of year $ 9,364 $ 8,713 $ 8,798 ( 1) Uncollectible accounts written off, net of recoveries (2) Includes allowance for doubtful accounts from acquisitions Fair Value of Financial Instruments The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. USGAAP establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. USGAAP prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. See Note 4 for further information regarding the Company’s financial instruments. Inventories Inventories consist principally of finished goods and are priced at lower of cost or market, cost being determined using the first-in, first-out (“FIFO”) method. Reserves are provided against inventories for estimated obsolescence based upon the aging of the inventories and market trends and are applied as a reduction in cost of associated inventory. Property and Equipment Property and equipment are carried on the basis of cost. Depreciation of property and equipment is computed using the straight-line method over their estimated useful lives. Maintenance and repairs of depreciable assets are charged against earnings as incurred. When properties are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and gains or losses are credited or charged to earnings. The principal estimated useful lives used in determining depreciation are as follows: Buildings 20-39 years Building improvements 10-20 years Furniture, fixtures and equipment 3-20 years Leasehold improvements Shorter of estimated useful life or related lease term Impairment of Goodwill and Other Intangible Assets The Company tests goodwill and other indefinite lived intangible assets for . The Company assigns the carrying value of these intangible assets to its "reporting units" and applies the test for goodwill at the reporting unit level. A reporting unit is defined as an operating segment or one level below a segment (a "component") if the component is a business and discrete information is prepared and reviewed regularly by segment management. The Company’s goodwill impairment assessment first permits evaluating qualitative factors to determine if a reporting unit's carrying value would more likely than not exceed its fair value. If the Company concludes, based on the qualitative assessment, that a reporting unit's carrying value would more likely than not exceed its fair value, the Company would perform a two-step quantitative test for that reporting unit. When a quantitative assessment is performed, the first step is to identify a potential impairment, and the second step measures the amount of the impairment loss, if any. Goodwill is deemed to be impaired if the carrying amount of a reporting unit’s goodwill exceeds its estimated fair value. During the third and fourth quarter of 2015, DXP performed interim impairment tests using a quantitative approach and recognized goodwill impairments of $57.8 million and $9.8 million, respectively. During the fourth quarter ended December 31, 2014, the Company performed its annual goodwill impairment test using a quantitative approach and recognized a goodwill impairment of $117.6 million (see Note 8). No impairment of goodwill was required in 2013. Impairment of Long-Lived Assets, Excluding Goodwill The Company tests long-lived assets or asset groups for recoverability on an annual basis and when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. Share-based Compensation The Company uses restricted stock for share-based compensation programs. The Company measures compensation cost with respect to equity instruments granted as stock-based payments to employees based upon the estimated fair value of the equity instruments at the date of the grant. The cost as measured is recognized as expense over the period which an employee is required to provide services in exchange for the award. Revenue Recognition For binding agreements to fabricate tangible assets to customer specifications, the Company recognizes revenues using the percentage of completion method. Under this method, revenues are recognized as costs are incurred and include estimated profits calculated on the basis of the relationship between costs incurred and total estimated costs at completion. If at any time expected costs exceed the value of the contract, the loss is recognized immediately. Revenues of approximately $47.5 million, $65.9 million, and $12.7 million were recognized on contracts in process for the years ended December 31, 2015, 2014, and 2013, respectively. The typical time span of these contracts is approximately one to two years. For other sales, the Company recognizes revenues when an agreement is in place, the price is fixed, title for product passes to the customer or services have been provided and collectability is reasonably assured. Revenues are recorded net of sales taxes. The Company reserves for potential customer returns based upon the historical level of returns. Shipping and Handling Costs The Company classifies shipping and handling charges billed to customers as sales. Shipping and handling charges paid to others are classified as a component of cost of sales. Self-insured Insurance and Medical Claims We generally retain up to $100,000 of risk for each claim for workers compensation, general liability, automobile and property loss. We accrue for the estimated loss on the self-insured portion of these claims. The accrual is adjusted quarterly based upon reported claims information. The actual cost could deviate from the recorded estimate. We generally retain up to $250,000 of risk on each medical claim for our employees and their dependents. We accrue for the estimated outstanding balance of unpaid medical claims for our employees and their dependents. The accrual is adjusted monthly based on recent claims experience. The actual claims could deviate from recent claims experience and be materially different from the reserve. The accrual for these claims at December 31, 2015 and 2014 was approximately $3.4 million and $2.9 million, respectively. Purchase Accounting DXP estimates the fair value of assets, including property, machinery and equipment and their related useful lives and salvage values, intangibles and liabilities when allocating the purchase price of an acquisition. The fair value estimates are developed using the best information available. Third party valuation specialists assist in valuing the Company’s significant acquisitions. Cost of Sales and Selling, General and Administrative Expense Cost of sales includes product and product related costs, inbound freight charges, internal transfer costs and depreciation. Selling, general and administrative expense includes purchasing and receiving costs, inspection costs, warehousing costs, depreciation and amortization. Debt Issuance Cost Amortization Fees paid to DXP’s lender to secure a firm commitment on a term loan and revolving line of credit are presented as a direct deduction from the carrying amount of the debt liability. For the term loan, fees paid by DXP are amortized over the life of the loan as additional interest. Fees paid to secure a firm commitment from our lender on a revolving line of credit are amortized on a straight-line basis over the entire term of the arrangement. The total unamortized debt issuance costs reported on the consolidated balance sheets as of December 31, 2015 and 2014 was $2.0 million and $2.7 million, respectively. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and income tax bases of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established to reduce deferred income tax assets to the amounts expected to be realized under a more likely than not criterion. Comprehensive Income Comprehensive income includes net income, foreign currency translation adjustments, unrecognized gains (losses) on postretirement and other employment-related plans, changes in fair value of certain derivatives, and unrealized gains and losses on certain investments in debt and equity securities. The Company’s other comprehensive (loss) income is comprised of changes in the market value of an investment with quoted market prices in an active market for identical instruments and translation adjustments from translating foreign subsidiaries to the reporting currency. Accounting for Uncertainty in Income Taxes A position taken or expected to be taken in a tax return is recognized in the financial statements when it is more likely than not (i.e. a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U. S. federal, state and local tax examination by tax authorities for years prior to 2009. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2015 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), In July 2015, the FASB issued ASU No. 2015-11, Inventory ("ASU 2015-11"). The amendments in ASU 2015-11 clarify the subsequent measurement of inventory requiring an entity to subsequently measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU applies only to inventory that is measured using the first-in, first-out (FIFO) or average cost method. Subsequent measurement is unchanged for inventory measured using last-in, first-out (LIFO) or the retail inventory method. The amendments in ASU 2015-11 should be applied prospectively and are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The company is currently assessing the impact that this standard will have on its consolidated financial statements. |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | NOTE 4 - 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. At December 31, 2014, DXP did not utilize level 2 inputs for any assets or liabilities. 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. The following table presents the changes in Level 1 assets for the period indicated ( in thousands Years Ended December 31, 2015 2014 Fair value at beginning of period $ $ 1,837 Investment during period - - Realized and unrealized gains (losses) included in other comprehensive income (149 ) Proceeds on sale of investment (1,688 ) Fair value at end of period $ - $ - The Company paid a total of $1.7 million for an investment with quoted market prices in an active market. During the year ended December 31, 2014, the Company sold this investment for $1.7 million. The Company recognized a $0.1 million loss in 2014 on the sale of this investment, which is included in other income within our condensed consolidated statements of income. During the third and fourth quarters of 2015, in connection with interim tests for impairment, DXP recorded impairment charges of $57.8 million and $9.8 million, respectively, in order to reflect the implied fair values of goodwill, which is a non-recurring fair value adjustment. The fair values of goodwill used in the impairment calculations were estimated based on discounted estimated future cash flows with the discount rates of 10.0% to 11.5%. The measurements utilized to determine the implied fair value of goodwill represent significant unobservable inputs (Level 3) in accordance with the fair value hierarchy. During the fourth quarter of 2014, in connection with the annual test for impairment, DXP recorded total impairment charges of $117.6 million in order to reflect the implied fair values of goodwill, which is a non-recurring fair value adjustment. The fair values of goodwill used in the impairment calculations were estimated based on discounted estimated future cash flows with the discount rates of 10.0% to 13.5%. The measurements utilized to determine the implied fair value of goodwill represent significant unobservable inputs (Level 3) in accordance with the fair value hierarchy. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2015 | |
INVENTORY [Abstract] | |
INVENTORY | NOTE 5 - INVENTORY The carrying values of inventories are as follows ( in thousands December 31, 2015 December 31, 2014 Finished goods $ 94,524 $ 99,732 Work in process 9,295 15,926 Inventories $ 103,819 $ 115,658 |
COSTS AND ESTIMATED EARNINGS ON
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS | 12 Months Ended |
Dec. 31, 2015 | |
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS [Abstract] | |
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS | NOTE 6 – COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS Costs and estimated earnings in excess of billings on uncompleted contracts arise in the consolidated balance sheets when revenues have been recognized but the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Costs and estimated earnings on uncompleted contracts and related amounts billed for 2015 and 2014 were as follows (in thousands): Year Ended December 31, 2015 2014 Costs incurred on uncompleted contracts $ 34,400 $ 49,133 Estimated earnings, thereon 13,119 16,749 Total 47,519 65,882 Less: billings to date 33,422 54,701 Net $ 14,097 $ 11,181 Such amounts were included in the accompanying Consolidated Balance Sheets for 2015 and 2014 under the following captions (in thousands): Year Ended December 31, 2015 2014 Costs and estimated earnings in excess of billings on uncompleted contracts $ 22,045 $ 20,083 Billings in excess of costs and estimated earnings on uncompleted contracts (8,021 ) (8,840 ) Translation Adjustment 73 (62 ) Net $ 14,097 $ 11,181 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 - PROPERTY AND EQUIPMENT The carrying values of property and equipment are as follows ( in thousands December 31, 2015 December 31, 2014 Land $ 2,386 $ 2,386 Buildings and leasehold improvements 16,631 13,490 Furniture, fixtures and equipment 102,494 97,829 Less – Accumulated depreciation (53,008 ) (43,726 ) Total Property and Equipment $ 68,503 $ 69,979 Depreciation expense was $12.6 million, $12.6 million, and $9.8 million for the years ended December 31, 2014, 2013, and 2012, respectively. Capital expenditures by segment are included in Note 17. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8 - GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents the changes in the carrying amount of goodwill and other intangible assets during the year ended December 31, 2015 ( in thousands Goodwill Other Intangible Assets Total Balance as of December 31, 2014 $ 253,312 $ 130,333 $ 383,645 Acquired during the period 11,713 7,263 18,976 Impairment (67,663 ) (1,072 ) (68,735 ) Translation adjustment - (3,606 ) (3,606 ) Amortization - (20,621 ) (20,621 ) Balance as of December 31, 2015 $ 197,362 $ 112,297 $ 309,659 The following table presents the changes in the carrying amount of goodwill and other intangible assets during the year ended December 31, 2014 ( in thousands Goodwill Other Intangible Assets Total Balance as of December 31, 2013 $ 188,110 $ 69,722 $ 257,832 Acquired during the period 182,771 85,264 268,035 Impairment (117,569 ) - (117,569 ) Translation adjustment - (2,173 ) (2,173 ) Amortization - (22,480 ) (22,480 ) Balance as of December 31, 2014 $ 253,312 $ 130,333 $ 383,645 The following table presents goodwill balance by reportable segment as of December 31, 2015 and 2014 (in thousands) As of December 31, 2015 2014 Service Centers $ 164,244 $ 167,302 Innovative Pumping Solutions 15,980 68,872 Supply Chain Services 17,138 17,138 Total $ 197,362 $ 253,312 During the third quarter of 2015, the price of DXP’s common stock and the price of crude oil declined over 40% and over 20%, respectively. This decline in oil prices reduced spending by our customers and reduced our revenue expectations. This sustained decline in crude oil prices, reduced capital spending by customers and reduced revenue expectations were determined to be a triggering event during the third quarter of 2015. This triggering event required us to perform testing for possible goodwill impairment in two of our reporting units, and our step one testing indicated there was an impairment in the B27 IPS and B27 SC reporting units. No triggering event was identified in our other reporting units during the third quarter. ASC 350 step two of the goodwill impairment testing for the reporting units was performed preliminarily during the third quarter of 2015. Our preliminary analysis concluded that $48.0 million of our B27 IPS reporting unit’s goodwill and $9.8 million of our B27 SC reporting unit’s goodwill was impaired. The remaining goodwill for the B27 IPS and B27 SC reporting units at September 30, 2015 was $4.9 million and $10.3 million, respectively. The September 30, 2015 ASC 350 step two testing was completed in the fourth quarter of 2015 without any adjustment to the amount recorded in the third quarter of 2015. Fair value was based on expected future cash flow using Level 3 inputs under Account Standards Codification 820 Fair Value Measurements DXP recorded $1.1 million of impairment expense in the third quarter of 2015 to write off an acquired intangible asset related to an ITT Goulds distribution agreement, which was terminated by ITT Goulds during 2015. The remaining intangible asset value of vendor distribution agreements for the year ended December 31, 2015 was zero. None of the impairment is expected to be deductible for tax purposes. During the fourth quarter of 2015, the price of DXP’s common stock and the price of crude oil declined over 16% and over 18%, respectively. This decline in oil prices reduced spending by our customers during the fourth quarter and resulted in fourth quarter actual earnings for the B27 IPS and B27 SC reporting units declining significantly from the forecasts used in the impairment analysis at the end of the third quarter of 2015. The declines in forecasted earnings for these two reporting units were determined to be a triggering event during the fourth quarter of 2015. This triggering event required us to perform testing for possible goodwill impairment in these two reporting units, and our step one testing indicated there may be an impairment in the B27 IPS and B27 SC reporting units. No triggering event was identified in our other reporting units during the fourth quarter. ASC 350 step two of the goodwill impairment testing for the reporting units was performed during the fourth quarter of 2015. Our analysis concluded that $4.9 million of our B27 IPS reporting unit’s goodwill and $5.0 million of our B27 SC reporting unit’s goodwill was impaired. Fair value was based on expected future cash flow using Level 3 inputs under ASC 820. The cash flows are those expected to be generated by market participants, discounted at a rate of return market participants would expect. The remaining goodwill for the B27 IPS and B27 SC reporting units at December 31, 2015 was zero and $5.3 million, respectively. Approximately 60% of the goodwill associated with the B27 acquisition is not deductible for tax purposes. Accordingly, the financial statement tax benefit is calculated for only 40% of the goodwill impairment. The pretax impairment impacted DXP’s effective tax rate for 2015. After recording the fourth quarter impairment loss, accumulated impairment for the B27 IPS and B27 SC reporting units were $148.0 million and $25.0 million, respectively, for the year ended December 31, 2015. As none of the Company’s other reporting units recorded impairment losses in 2015, accumulated impairment for these units remained at $12.3 million. During the fourth quarter of 2014, DXP performed its annual goodwill impairment test at its B27 IPS reporting unit and recognized impairment expense of $95.1 million. In performing the goodwill impairment test, Step 1 of the test failed as the fair value of the reporting unit no longer exceeded its carrying amount primarily due to actual revenues being lower than revenues forecasted as of the date of acquisition and the decline in oil prices during the third quarter of 2014. Fair value was based on expected future cash flow using Level 3 inputs under ASC 820. The cash flows are those expected to be generated by market participants, discounted at a rate of return market participants would expect. In Step 2, goodwill with a carrying amount of $148.0 million was determined to have an implied fair value of $52.9 million after the hypothetical purchase price allocation under US GAAP guidance for business combinations. Approximately 60% of the goodwill associated with the B27 acquisition is not deductible for tax purposes. Accordingly, the financial statement tax benefit is calculated for only 40% of the goodwill impairment. The pretax impairment impacted DXP’s effective tax rate for 2014. B27 IPS is reported in the IPS reportable segment. The Company has not previously recorded an impairment loss for the reporting unit. For the year ended December 31, 2014, accumulated impairment for the B27 IPS reporting unit was $95.1 million. During the fourth quarter of 2014, DXP performed its annual goodwill impairment test at its NatPro IPS reporting unit and recognized impairment expense of $12.3 million consisting of goodwill. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. The cash flows are those expected to be generated by the market participants, discounted at a rate of return market participants would expect. Goodwill was determined to have an implied fair value of zero after the hypothetical purchase price allocation under US GAAP guidance for business combinations. None of the goodwill associated with the NatPro acquisition is deductible for tax purposes. The pretax goodwill impairment impacted DXP's effective tax rate for 2014. NatPro IPS is reported in the IPS reportable segment. The Company has not previously recorded an impairment loss for the reporting unit. For the year ended December 31, 2014, accumulated impairment for the NatPro IPS reporting unit was $12.3 million. During the fourth quarter of 2014, DXP performed its annual goodwill impairment test at its B27 SC reporting unit and recognized a goodwill impairment expense of $10.2 million. In performing the goodwill impairment test, Step 1 of the test failed as the fair value of the reporting unit no longer exceeded its carrying amount primarily due to actual revenues being lower than revenues forecasted as of the date of acquisition and the decline in oil prices during the third quarter of 2014. Fair value was based on expected future cash flow using Level 3 inputs under ASC 820. The cash flows are those expected to be generated by market participants, discounted at a rate of return market participants would expect. In Step 2, goodwill was determined to have an implied fair value of $20.1 million after the hypothetical purchase price allocation under USGAAP guidance for business combinations. Approximately 60% of the goodwill associated with the B27 acquisition is not deductible for tax purposes. Accordingly, the financial statement tax benefit is calculated for only 40% of the impairment. The pretax impairment impacted DXP’s effective tax rate for 2014. B27 Service Centers is reported in the Service Centers reportable segment. The Company has not previously recorded an impairment loss for the reporting unit. For the year ended December 31, 2014, accumulated impairment for the B27 Service Centers reporting unit was $10.2 million. The impairment losses during the years ended December 31, 2015 and 2014 are included in the “impairment expense” line item on the consolidated statements of income (loss). The following table presents a summary of amortizable other intangible assets ( in thousands As of December 31, 2015 As of December 31, 2014 Gross Carrying Amount Accumulated Amortization Carrying Amount, net Gross Carrying Amount Accumulated Amortization Carrying Amount, net Vendor agreements $ 2,496 $ (2,496 ) $ - $ 2,496 $ (1,330 ) $ 1,166 Customer relationships 195,580 (83,741 ) 111,839 192,512 (63,957 ) 128,555 Non-compete agreements 1,815 (1,357 ) 458 1,737 (1,125 ) 612 Total $ 199,891 $ (87,594 ) $ 112,297 $ 196,745 $ (66,412 ) $ 130,333 Customer relationships are amortized over their estimated useful lives. Amortization expense is recognized according to estimated economic benefits and was $20.6 million, $22.5 million, and $11.8 million for the years ended December 31, 2015, 2014, and 2013, respectively. The estimated future annual amortization of intangible assets for each of the next five years and thereafter are as follows (in thousands) 2016 $ 18,161 2017 17,304 2018 15,657 2019 14,212 2020 10,778 Thereafter 36,185 The weighted average remaining estimated life for customer relationships and non-compete agreements are 9.9 years and 2.9 years, respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2015 | |
LONG-TERM DEBT [Abstract] | |
LONG-TERM DEBT | NOTE 9 – LONG-TERM DEBT Long-term debt consisted of the following ( in thousands December 31, 2015 2014 Line of credit $ 172,147 $ 193,443 Term loan 175,000 212,500 Promissory note payable in monthly installments at 2.9% through January 2021, collateralized by equipment 4,408 5,216 Unsecured subordinated notes payable in quarterly installments at 5% - 357 Less unamortized debt issuance costs (2,046 ) (2,714 ) Total Debt 349,509 408,802 Less: Current maturities (50,829 ) (38,608 ) Total Long-term Debt $ 298,680 $ 370,194 On July 11, 2012, DXP entered into a credit facility with Wells Fargo Bank National Association, as Issuing Lender, Swingline Lender and Administrative Agent for the lenders (as amended, the “Original Facility”). On January 2, 2014, the Company entered into an Amended and Restated Credit Agreement with Wells Fargo Bank, National Association, as Issuing Lender and Administrative Agent for other lenders (as thereafter amended or restated, the “Facility”), amending and restating the Original Facility. On August 6, 2015 and September 30, 2015, DXP amended the Facility. The Facility provides a term loan and a $350 million revolving line of credit to the Company. At December 31, 2015, the term loan component of the Facility was $175.0 million. The Facility expires on January 2, 2019. The Facility provides the option of interest at LIBOR (or CDOR for Canadian dollar loans) plus an applicable margin ranging from 1.25% to 2.75% or prime plus an applicable margin from 0.25% to 1.75% where the applicable margin is determined by the Company’s leverage ratio as defined by the Facility as of the last day of the fiscal quarter most recently ended prior to the date of borrowing. Commitment fees of 0.20% to 0.50% per annum are payable on the portion of the Facility capacity not in use at any given time on the line of credit. Commitment fees are included as interest in the consolidated statements of income. On December 31, 2015, the LIBOR based rate of the Facility was LIBOR plus 2.25% the prime based rate of the Facility was prime plus 1.25%, and the commitment fee was 0.40%. At December 31, 2015, $347.1 million was borrowed under the Facility at a weighted average interest rate of approximately 2.67% under the LIBOR options. At December 31, 2015, the Company had $19.8 million available for borrowing under the Facility. The Facility contains financial covenants defining various financial measures and levels of these measures with which the Company must comply. Covenant compliance is assessed as of each quarter end. Substantially all of the Company’s assets are pledged as collateral to secure the Facility. At December 31, 2015, the Facility’s principal financial covenants included: Consolidated Leverage Ratio – The Facility requires that the Company’s Consolidated Leverage Ratio, determined at the end of each fiscal quarter, not exceed 4.25 to 1.00 as of the last day of each quarter through September 30, 2016, not to exceed 4.00 to 1.00 on December 31, 2016, not to exceed 3.75 to 1.00 from March 31, 2017 through June 30, 2017, not to exceed 3.50 to 1.00 from September 30, 2017 through December 31, 2017, and not to exceed 3.25 to 1.00 on March 31, 2018 and thereafter. The Consolidated Leverage Ratio is defined as the outstanding indebtedness divided by Consolidated EBITDA for the period of four consecutive fiscal quarters ending on or immediately prior to such date. Indebtedness is defined under the Facility for financial covenant purposes as: (a) all obligations of DXP for borrowed money including but not limited to obligations evidenced by bonds, debentures, notes or other similar instruments; (b) obligations to pay deferred purchase price of property or services; (c) capital lease obligations; (d) obligations under conditional sale or other title retention agreements relating to property purchased; and (e) contingent obligations for funded indebtedness. At December 31, 2015, the Company’s Leverage Ratio was 4.02 to 1.00. Consolidated Fixed Charge Coverage Ratio – The Facility requires that the Consolidated Fixed Charge Coverage Ratio on the last day of each quarter be not less than 1.15 to 1.00 through December 31, 2016 and not less than 1.25 to 1.00 on March 31, 2017 and thereafter, with “Consolidated Fixed Charge Coverage Ratio” defined as the ratio of (a) Consolidated EBITDA for the period of 4 consecutive fiscal quarters ending on such date minus capital expenditures during such period (excluding acquisitions) minus income tax expense paid minus the aggregate amount of restricted payments defined in the agreement to (b) the interest expense paid in cash, scheduled principal payments in respect of long-term debt and the current portion of capital lease obligations for such 12-month period, determined in each case on a consolidated basis for DXP and its subsidiaries. At December 31, 2015, the Company's Consolidated Fixed Charge Coverage Ratio was 1.23 to 1.00. Asset Coverage Ratio –The Facility requires that the Asset Coverage Ratio at any time be not less than 1.0 to 1.0 with “Asset Coverage Ratio” defined as the ratio of (a) the sum of 85% of net accounts receivable plus 65% of net inventory to (b) the aggregate outstanding amount of the revolving credit on such date. At December 31, 2015, the Company's Asset Coverage Ratio was 1.15 to 1.00. Consolidated EBITDA as defined under the Facility for financial covenant purposes means, without duplication, for any period the consolidated net income of DXP plus, to the extent deducted in calculating consolidated net income, depreciation, amortization (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future), non-cash compensation including stock option or restricted stock expense, interest expense and income tax expense for taxes based on income, certain one-time costs associated with our acquisitions, integration costs, facility consolidation and closing costs, write-down of cash expenses incurred in connection with the existing credit agreement and extraordinary losses less interest income and extraordinary gains. Consolidated EBITDA shall be adjusted to give pro forma effect to disposals or business acquisitions assuming that such transaction(s) had occurred on the first day of the period excluding all income statement items attributable to the assets or equity interests that is subject to such disposition made during the period and including all income statement items attributable to property or equity interests of such acquisitions permitted under the Facility. The following table sets forth the computation of the Leverage Ratio as of December 31, 2015 ( in thousands, except for ratios For the Twelve Months ended December 31, 2015 Leverage Ratio Loss before taxes $ (38,920 ) Loss attributable to noncontrolling interest 813 Interest expense 10,932 Depreciation and amortization 33,243 Impairment expense 68,735 Stock compensation expense 2,973 Pro forma acquisition EBITDA 2,244 B27 settlment 7,348 (A) $ 87,368 As of December 31, 2015 Total long-term debt, including current maturities $ 349,509 Unamortized debt issuance costs 2,046 (B) $ 351,555 Leverage Ratio (B)/(A) 4.02 The following table sets forth the computation of the Fixed Charge Coverage Ratio as of December 31, 2015 ( in thousands, except for ratios For the Twelve Months ended December 31, 2015 Defined EBITDA $ 87,368 Cash paid for income taxes 13,792 Capital expenditures 13,992 (A) $ 59,584 Cash interest payments $ 9,721 Dividends 90 Scheduled principal payments 38,666 (B) $ 48,477 Fixed Charge Coverage Ratio (A)/(B) 1.23 The following table sets forth the computation of the Asset Coverage Ratio as of December 31, 2015 ( in thousands, except for ratios Credit facility outstanding balance $ 172,147 Outstanding letters of credit 6,305 Defined indebtedness $ 178,452 Accounts receivable (net), valued at 85% of gross $ 138,486 Inventory, valued at 65% of gross 67,482 $ 205,968 Asset Coverage Ratio 1.15 As of December 31, 2015, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands 2016 $ 50,829 2017 63,356 2018 63,381 2019 173,055 2020 934 Thereafter - |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 10 - INCOME TAXES The components of income before income taxes are as follows ( in thousands Years Ended December 31, 2015 2014 2013 Domestic $ (42,179 ) $ (21,349 ) $ 86,567 Foreign 3,259 (4,207 ) 8,150 Total income before taxes $ (38,920 ) $ (25,556 ) $ 94,717 The provision for income taxes consists of the following ( in thousands Years Ended December 31, 2015 2014 2013 Current - Federal $ 5,182 $ 24,050 $ 21,481 State 1,499 5,604 2,681 Foreign 2,493 2,150 7,484 9,174 31,804 31,646 Deferred - Federal (7,090 ) (10,544 ) 8,631 State - (1,769 ) 167 Foreign (1,934 ) 191 (5,964 ) (9,024 ) (12,122 ) 2,834 $ 150 $ 19,682 $ 34,480 The difference between income taxes computed at the federal statutory income tax rate (35%) and the provision for income taxes is as follows ( in thousands Years Ended December 31, 2015 2014 2013 Income taxes computed at federal statutory rate $ (13,622 ) $ (8,945 ) $ 33,150 State income taxes, net of federal benefit 974 2,492 1,852 Non-tax deductible impairment expense computed at federal statutory rate 15,765 24,444 - Foreign adjustment 689 1,353 - Meals and entertainment 620 801 561 Domestic Production Activity Deduction (1,143 ) (1,040 ) (566 ) Research and development tax credit (1,730 ) (587 ) - Foreign tax credit (921 ) (343 ) - Other, primarily non-tax deductible, or non-taxable items (482 ) 1,507 (517 ) $ 150 $ 19,682 $ 34,480 The net current and noncurrent components of deferred income tax balances are as follows ( in thousands December 31, 2015 2014 Net current assets $ 8,996 $ 8,250 Net non-current liabilities (6,312 ) (21,284 ) Net assets (liabilities) $ 2,684 $ (13,034 ) Deferred tax liabilities and assets were comprised of the following ( in thousands December 31, 2015 2014 Deferred tax assets: Goodwill $ 23,334 $ 17,906 Allowance for doubtful accounts 2,692 2,979 Inventories 3,312 2,691 Accruals 2,354 2,125 Other 730 990 Total deferred tax assets 32,422 26,691 Deferred tax liabilities Intangibles (27,512 ) (33,874 ) Property and equipment (10,824 ) (10,343 ) Unremitted foreign earnings (259 ) (52 ) Cumulative translation adjustment 8,605 4,014 Other 252 530 Net deferred tax asset (liability) $ 2,684 $ (13,034 ) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED COMPENSATION [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 11 - SHARE-BASED COMPENSATION Restricted Stock Under the restricted stock plan approved by our shareholders (the “Restricted Stock Plan”), directors, consultants and employees may be awarded shares of DXP’s common stock. The shares of restricted stock granted to employees and that are outstanding as of December 31, 2015 vest in accordance with one of the following vesting schedules: 100% one year after date of grant; 33.3% each year for three years after date of grant; 20% each year for five years after date of grant; or 10% each year for ten years after date of grant. The Restricted Stock Plan provides that on each July 1 during the term of the plan each non-employee director of DXP will be granted the number of whole shares calculated by dividing $75,000 by the closing price of the common stock on such July 1. The shares of restricted stock granted to non-employee directors of DXP vest one year after the grant date. The fair value of restricted stock awards is measured based upon the closing prices of DXP’s common stock on the grant dates and is recognized as compensation expense over the vesting period of the awards. Once restricted stock vests, new shares of the Company’s stock are issued. The following table provides certain information regarding the shares authorized and outstanding under the Restricted Stock Plan at December 31, 2015: Number of shares authorized for grants 800,000 Number of shares granted (862,349 ) Number of shares forfeited 143,876 Number of shares available for future grants 81,527 Weighted-average grant price of granted shares $ 28.21 Changes in restricted stock for the twelve months ended December 31, 2015 were as follows: Number of Shares Weighted Average Grant Price Non-vested at December 31, 2014 179,942 $ 52.71 Granted 24,971 $ 40.95 Forfeited (20,855 ) $ 41.34 Vested (57,401 ) $ 44.99 Non-vested at December 31, 2015 126,657 $ 55.54 Compensation expense, associated with restricted stock, recognized in the years ended December 31, 2015, 2014 and 2013 was $3.0 million, $3.6 million, and $2.8 million, respectively. Related income tax benefits recognized in earnings in the years ended December 31, 2015, 2014 and 2013 were approximately $1.2 million, $1.4 million and $1.1 million, respectively. Unrecognized compensation expense under the Restricted Stock Plan at December 31, 2015 and December 31, 2014 was $4.9 million and $6.9 million, respectively. As of December 31, 2015, the weighted average period over which the unrecognized compensation expense is expected to be recognized is 22.9 months. |
EARNINGS PER SHARE DATA
EARNINGS PER SHARE DATA | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE DATA [Abstract] | |
EARNINGS PER SHARE DATA | NOTE 12 - 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. In 2015, we excluded the potential dilution of convertible preferred stock, which could be converted into 840,000 shares because they would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data December 31, 2015 2014 2013 Basic: Weighted average shares outstanding 14,423 14,639 14,439 Net income (loss) attributable to DXP Enterprises, Inc. $ (38,536 ) $ (45,238 ) $ 60,237 Convertible preferred stock dividend (90 ) (90 ) (90 ) Net income (loss) attributable to common shareholders $ (38,626 ) $ (45,328 ) $ 60,147 Per share amount $ (2.68 ) $ (3.10 ) $ 4.17 Diluted: Weighted average shares outstanding 14,423 14,639 14,439 Assumed conversion of convertible preferred stock - - 840 Total dilutive shares 14,423 14,639 15,279 Net income (loss) attributable to common shareholders $ (38,626 ) $ (45,328 ) $ 60,147 Convertible preferred stock dividend - - 90 Net income (loss) attributable to DXP Enterprises, Inc. for diluted earnings per share $ (38,626 ) $ (45,328 ) $ 60,237 Per share amount $ (2.68 ) $ (3.10 ) $ 3.94 Basic earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding during the period and excludes dilutive securities. Diluted earnings per share reflects the potential dilution that could occur if the preferred stock was converted into common stock. Restricted stock is considered a participating security and is included in the computation of basic earnings per share as if vested. Because holders of Preferred Stock do not participate in losses, the loss was not allocated to Preferred Stock for fiscal year 2015. The Preferred Stock is convertible into 840,000 shares of common stock. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2015 | |
BUSINESS ACQUISITIONS [Abstract] | |
BUSINESS ACQUISITIONS | NOTE 13 - BUSINESS ACQUISITIONS All of the Company’s acquisitions have been accounted for using the purchase method of accounting. Revenues and expenses of the acquired businesses have been included in the accompanying consolidated financial statements beginning on their respective dates of acquisition. The allocation of purchase price to the acquired assets and liabilities is based on estimates of fair market value and may be revised if and when additional information the Company is awaiting concerning certain asset and liability valuations is obtained, provided that such information is received no later than one year after the date of acquisition. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. It specifically includes the expected synergies and other benefits that we believe will result from combining the operations of our acquisitions with the operations of DXP and any intangible assets that do not qualify for separate recognition such as the assembled workforce. On January 2, 2014, the Company completed the acquisition of all of the equity securities and units of B27, LLC (“B27”) by way of a Securities Purchase Agreement to expand DXP’s pump packaging offering On May 1, 2014, the Company completed the acquisition of all of the equity interests of Machinery Tooling and Supply, LLC (“MT&S”) to expand DXP’s cutting tools offering in the North Central region of the United States. DXP paid approximately $14.6 million for MT&S, which was borrowed under the Facility. DXP has not completed appraisals of intangibles for MT&S, the valuation of working capital items or completed analysis of tax effects, and therefore, has made preliminary estimates for purposes of this disclosure. Estimated goodwill of $4.3 million and intangible assets of $4.1 million were recognized for this acquisition. All of the estimated goodwill is included in the Service Centers segment. On April 1, 2015, the Company completed the acquisition of all of the equity interests of Tool Supply, Inc. (“TSI”) to expand DXP’s cutting tools offering in the Northwest region of the United States. DXP paid approximately $5.0 million for TSI, which was borrowed under the Facility. Estimated goodwill of $2.9 million and intangible assets of $2.0 were recognized for this acquisition. All of the estimated goodwill is included in the Service Centers segment. None of the estimated goodwill or intangible assets are expected to be tax deductible. On September 1, 2015, the Company completed the acquisition of all of the equity interests of Cortech Engineering, LLC (“Cortech”) to expand DXP’s rotating equipment offering to the Western seaboard. DXP paid approximately $14.9 million for Cortech. The purchase was financed with borrowings under the Facility as well as by issuing $4.4 million (148.8 thousand shares) of DXP common stock. DXP has not completed valuations of intangibles for Cortech, the valuation of working capital items or completed the analysis of the tax effects, and therefore has made preliminary estimates for the purposes of this disclosure. Estimated goodwill of $8.8 million and intangible assets of $5.2 were recognized for this acquisition. All of the estimated goodwill is included in the Service Centers segment. Approximately $4.5 million of the goodwill and intangible assets are not deductible for tax purposes. The value assigned to the non-compete agreements and customer relationships for business acquisitions were determined by discounting the estimated cash flows associated with non-compete agreements and customer relationships as of the date the acquisition was consummated. The estimated cash flows were based on estimated revenues net of operating expenses and net of capital charges for assets that contribute to the projected cash flow from these assets. The projected revenues and operating expenses were estimated based on management estimates. Net capital charges for assets that contribute to projected cash flow were based on the estimated fair value of those assets. For B27, a discount rate of 13.5% was deemed appropriate for valuing these assets and were based on the risks associated with the respective cash flows taking into consideration the acquired company’s weighted average cost of capital. For the twelve months ended December 31, 2015, businesses acquired during 2015 and 2014 contributed sales of $9.1 million and $171.1 million, respectively, and earnings (loss) before taxes of approximately $0.2 million and $(91.5) million, respectively. Earnings before taxes include impairment charges of $67.7 million for businesses acquired in 2014. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed during 2015 and 2014 in connection with the acquisitions described above ( in thousands 2015 2014 TSI CORTECH B27 MT&S Cash $ - $ - $ 2,538 $ 806 Accounts Receivable, net 442 2,293 51,448 5,656 Inventory 475 1,243 6,472 2,522 Property and equipment 42 253 14,573 557 Goodwill and intangibles 1 4,929 14,048 259,412 8,405 Other assets 100 21 1,791 59 Assets acquired 5,988 17,858 336,234 18,005 Current liabilities assumed (335 ) (2,610 ) (26,690 ) (3,336 ) Non-current liabilities assumed 2 (653 ) (349 ) (15,992 ) - Net assets acquired $ 5,000 $ 14,899 $ 293,552 $ 14,669 (1) The amounts in the table above have not been reduced by the $105.3 million, or the $67.7 million, of goodwill impairment charges for B27 recorded in the fourth quarter of 2014 and the second half of 2015, respectively. (2) Includes deferred tax liability of $0.6 million and $16.0 million related to intangible assets acquired for 2015 and 2014, respectively. The pro forma unaudited results of operations for the Company on a consolidated basis for the twelve months ended December 31, 2015 and 2014, assuming the acquisition of businesses completed in 2015 and 2014 (previously discussed in Item 1, Business in millions, except per share amounts Years Ended December 31, 2015 2014 Net sales $ 1,263 $ 1,541 Net income (loss) attributable to DXP Enterprises, Inc. $ (37 ) $ (44 ) Per share data attributable to DXP Enterprises, Inc. Basic earnings (loss) $ (2.60 ) $ (2.99 ) Diluted earnings (loss) $ (2.60 ) $ (2.99 ) The pro forma unaudited results of operations for the Company on a consolidated basis for the twelve months ended December 31, 2014 and 2013, assuming the acquisition of businesses completed in 2014 and 2013 (previously discussed in Item 1, Business in millions, except per share amounts Years Ended December 31, 2014 2013 Net sales $ 1,513 $ 1,496 Net income (loss) $ (45 ) $ 71 Per share data Basic earnings (loss) $ (3.08 ) $ 4.90 Diluted earnings (loss) $ (3.08 ) $ 4.64 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 - COMMITMENTS AND CONTINGENCIES The Company leases equipment, automobiles and office facilities under various operating leases. The future minimum rental commitments as of December 31, 2015, for non-cancelable leases are as follows ( in thousands 2016 $ 23,951 2017 19,215 2018 12,676 2019 7,497 2020 4,058 Thereafter 9,861 Rental expense for operating leases was $32.7 million, $32.3 million and $27.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company’s commitments related to long-term debt are discussed in Note 9. 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. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 15 - EMPLOYEE BENEFIT PLANS The Company offers a 401(K) plan which is eligible to substantially all employees in the United States. During 2015, 2014 and 2013, the Company elected to match employee contributions at a rate of 50 percent of up to 4 percent of salary deferral. The Company contributed $2.6 million, $2.5 million, and $2.7 million to the 401(K) plan in the years ended December 31, 2015, 2014, and 2013, respectively. |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2015 | |
OTHER COMPREHENSIVE INCOME [Abstract] | |
OTHER COMPREHENSIVE INCOME | NOTE 16 - OTHER COMPREHENSIVE INCOME Other comprehensive income generally represents all changes in shareholders’ equity during the period, except those resulting from investments by, or distributions to, shareholders. During 2015, 2014, and 2013 the Company had net other comprehensive (loss) income of $0.0 million, ($0.1) million and ($0.6) million, respectively, related to changes in the market value of an investment with quoted market prices in an active market for identical instruments. During 2012 and 2013, the Company acquired four entities that operate in Canada. These Canadian entities maintain financial data in Canadian dollars. Upon consolidation, the Company translates the financial data from these foreign subsidiaries into U.S. dollars and records cumulative translation adjustments in other comprehensive income. The Company recorded ($4.9) million, ($3.3) million and ($3.0) million in translation adjustments, net of tax, in other comprehensive income during the years ended December 31, 2015, 2014 and 2013, respectively. Related income tax benefits for the other comprehensive income losses on cumulative translation adjustments for the years ended December 31, 2015, 2014 and 2013 were $2.6 million, $1.7 million and $1.6 million, respectively. |
SEGMENT AND GEOGRAPHICAL REPORT
SEGMENT AND GEOGRAPHICAL REPORTING | 12 Months Ended |
Dec. 31, 2015 | |
SEGMENT AND GEOGRAPHICAL REPORTING [Abstract] | |
SEGMENT AND GEOGRAPHICAL REPORTING | NOTE 17 – SEGMENT AND GEOGRAPHICAL 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 and equipment, 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 manages all or part of a customer's MRO products 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. Business Segmented Financial Information The following table sets out financial information relating the Company’s segments ( in thousands Years Ended December 31, Service Centers Innovative Pumping Solutions Supply Chain Services Total 2015 Sales $ 826,588 $ 254,829 $ 165,626 $ 1,247,043 Operating income for reportable segments, excluding impairment expense 78,170 21,584 14,213 113,967 Identifiable assets at year end 451,333 159,365 50,012 660,710 Capital expenditures 3,185 8,383 604 12,172 Depreciation 7,734 2,930 227 10,891 Amortization 10,334 8,406 1,881 20,621 Interest expense 2,967 6,881 1,084 10,932 Impairment expense by segment 15,842 52,893 - 68,735 2014 Sales $ 987,561 $ 348,134 $ 163,967 $ 1,499,662 Operating income for reportable segments, excluding impairment expense 107,699 51,162 13,794 172,655 Identifiable assets at year end 568,182 202,228 54,637 825,047 Capital expenditures 4,100 4,043 122 8,265 Depreciation 8,416 2,381 397 11,194 Amortization 11,281 8,993 2,206 22,480 Interest expense 3,422 8,451 924 12,797 Impairment expense by segment 10,210 107,359 - 117,569 2013 Sales $ 884,821 $ 209,175 $ 147,514 $ 1,241,510 Operating income for reportable segments 107,142 33,766 12,490 153,398 Identifiable assets at year end 500,978 66,007 48,049 615,034 Capital expenditures 6,321 357 206 6,884 Depreciation 7,770 446 366 8,582 Amortization 8,574 1,043 2,213 11,830 Years Ended December 31, 2015 2014 2013 Operating income for reportable segments, excluding impairment expense $ 113,967 $ 172,655 $ 153,398 Adjustments for: B27 settlement 7,348 - - Impairment expense 68,735 117,569 - Amortization of intangibles 20,621 22,480 11,830 Corporate and other expense, net 45,179 45,234 40,644 Total operating income (loss) (27,916 ) (12,628 ) 100,924 Interest expense 10,932 12,797 6,282 Other expenses (income), net 72 131 (75 ) Income (loss) before income taxes $ (38,920 ) $ (25,556 ) $ 94,717 The Company had capital expenditures at Corporate of $1.8 million, $0.8 million, and $0.9 million for the years ended December 31, 2015, 2014, and 2013, respectively. The Company had identifiable assets at Corporate of $23.3 million, $19.3 million, and $20.3 million as of December 31, 2015, 2014, and 2013, respectively. Corporate depreciation was $1.7 million, $1.4 million, and $1.2 million for the years ended December 31, 2015, 2014, and 2013, respectively. Geographical Information Revenues are presented in geographic area based on location of the facility shipping products or providing services. Long-lived assets are based on physical locations and are comprised of the net book value of property. The Company’s revenues and property and equipment by geographical location are as follows (in thousands) Years Ended December 31, 2015 2014 2013 Revenues United States $ 1,119,210 $ 1,300,493 $ 1,075,962 Canada 127,833 195,633 165,548 Other - 3,536 - Total $ 1,247,043 $ 1,499,662 $ 1,241,510 As of December 31, 2015 2014 Property and Equipment, net United States $ 53,695 $ 49,013 Canada 14,724 20,966 Dubai 84 - Total $ 68,503 $ 69,979 |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | NOTE 18 - QUARTERLY FINANCIAL INFORMATION (unaudited) Summarized quarterly financial information for the years ended December 31, 2015, 2014 and 2013 is as follows ( in millions, except per share data First Quarter (1) Second Quarter (1) Third Quarter (1) Fourth Quarter 2015 Sales $ 341.6 $ 323.7 $ 303.1 $ 278.6 Gross profit 98.1 91.3 85.7 76.9 Impairment expense - - 58.9 9.8 Net income (loss) 9.7 7.2 (52.7 ) (3.2 ) Net income (loss) attributable to DXP Enterprises, Inc. 9.7 7.2 (52.4 ) (3.0 ) Earnings (loss) per share - basic $ 0.67 $ 0.50 $ (3.64 ) $ (0.20 ) Earnings (loss) per share - diluted $ 0.63 $ 0.47 $ (3.64 ) $ (0.20 ) 2014 Sales $ 348.5 $ 381.6 $ 387.0 $ 382.6 Gross profit 101.7 111.0 113.4 106.7 Impairment expense - - - 117.6 Net income (loss) 10.9 14.9 17.0 (88.1 ) Earnings (loss) per share - basic $ 0.74 $ 1.01 $ 1.16 $ (6.09 ) Earnings (loss) per share - diluted $ 0.70 $ 0.96 $ 1.10 $ (6.09 ) 2013 Sales $ 290.1 $ 307.9 $ 329.7 $ 313.8 Gross profit 89.1 91.5 97.1 94.6 Net income 13.2 13.7 16.4 16.9 Earnings per share - basic $ 0.92 $ 0.95 $ 1.13 $ 1.17 Earnings per share - diluted $ 0.87 $ 0.90 $ 1.07 $ 1.10 The sum of the individual quarterly earnings per share amounts may not agree with year-to-date earnings per share as each quarter’s computation is based on the weighted average number of shares outstanding during the quarter, the weighted average stock price during the quarter and the dilutive effects of the stock options and restricted stock in each quarter. (1) During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. The first three quarters of 2014 were revised as follows: Previously Reported First Quarter Adjusted First Quarter Previously Reported Second Quarter Adjusted Second Quarter Previously Reported Third Quarter Adjusted Third Quarter Sales $ 348.5 $ 348.5 $ 381.6 $ 381.6 $ 387.0 $ 387.0 Gross profit 101.7 101.7 111.0 111.0 113.4 113.4 Net income (loss) 11.6 10.9 15.5 14.9 17.6 17.0 Earnings (loss) per share Basic $ 0.79 $ 0.74 $ 1.06 $ 1.01 $ 1.20 $ 1.16 Diluted $ 0.75 $ 0.70 $ 1.00 $ 0.96 $ 1.14 $ 1.10 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTIES [Abstract] | |
RELATED PARTIES | NOTE 19 – RELATED PARTIES The Board uses policies and procedures, to be applied by the Audit Committee of the Board, for review, approval or ratification of any transactions with related persons. Those policies and procedures will apply to any proposed transactions in which DXP is a participant, the amount involved exceeds $120,000 and any director, executive officer or significant shareholder or any immediate family member of such a person has a direct or material indirect interest. Any related party transaction will be reviewed by the Audit Committee of the Board of Directors to determine, among other things, the benefits of any transaction to DXP, the availability of other sources of comparable products or services and whether the terms of the proposed transaction are comparable to those provided to unrelated third parties. For the year ended December 31, 2015, the Company paid approximately $1.7 million in lease expenses to entities controlled by the Company’s Chief Executive Officer, David Little, $1.1 million in lease expenses to an entity in which a senior vice president holds a minority interest, and $0.2 million in lease expenses to an entity in which a senior vice president holds an interest, and the children of David Little hold a majority interest. The Company employs six people who work for David Little, and Mr. Little reimbursed the Company for the cost. Total cost to Mr. Little for the year ended December 31, 2015 for payroll, related payroll expenses, vehicles, fuel and supplies was $0.4 million. The Company employs two sons and two sons-in-laws of executives. Total wages and other compensation for 2015 was approximately $0.5 million for the four employees. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS We have evaluated subsequent events through the date the consolidated financial statements were issued. There were no subsequent events that required recognition for disclosure unless elsewhere identified in this report. |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”). The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its variable interest entity (“VIE”). DXP is the primary beneficiary of a VIE in which DXP owns 47.5% of the equity. DXP consolidates the financial statements of the VIE with the financial statements of DXP. As of December 31, 2015, the total assets of the VIE were approximately $4.0 million including $0.3 million of cash and approximately $3.6 million of fixed assets. DXP is the sole customer of the VIE. Consolidation of the VIE increased cost of sales by approximately $1.4 million for the twelve months ended December 31, 2015. The Company recognized a related income tax benefit of $0.3 million related to the VIE for the year ended December 31, 2015. At December 31, 2015, the owners of the 52.5% of the equity not owned by DXP included an executive officer and other employees of DXP. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation; none affected net income. |
Foreign Currency | Out-of-Period Items During the first quarter of 2015, we identified a $2.5 million ($1.6 million net of tax) overstatement of an accrual at December 31, 2014, which overstated 2014 selling, general and administrative expense. We recorded an out-of-period adjustment to correct this overstatement in the quarter ended March 31, 2015. During the fourth quarter of 2015, we realized $1.5 million of net tax benefits related to events which occurred in earlier years. These out-of-period items reduced the 2015 net loss by $3.1 million and 2015 basic and diluted net loss per share by $0.21. We assessed the materiality of this overstatement and concluded the overstatement was not material to the results of operations or financial condition for the years ended December 31, 2015 and 2014. Foreign Currency The financial statements of the Company’s Canadian subsidiaries are measured using local currencies as their functional currencies. Assets and liabilities are translated into U.S. dollars at current exchange rates, while income and expenses are translated at average exchange rates. Translation gains and losses are reported in other comprehensive income (loss). Gains and losses on transactions denominated in foreign currency are reported in consolidated statements of income (loss). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company’s presentation of cash includes cash equivalents. Cash equivalents are defined as short-term investments with maturity dates of 90 days or less at time of purchase. The Company places its cash and cash equivalents with institutions with high credit quality. However, at certain times, such cash and cash equivalents may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. |
Receivables and Credit Risk | Receivables and Credit Risk Trade receivables consist primarily of uncollateralized customer obligations due under normal trade terms, which usually require payment within 30 days of the invoice date. However, these payment terms are extended in select cases and customers may not pay within stated trade terms. The Company has trade receivables from a diversified customer base located primarily in the Rocky Mountain, Northeastern, Midwestern, Southeastern and Southwestern regions of the United States, and Canada. The Company believes no significant concentration of credit risk exists. The Company evaluates the creditworthiness of its customers' financial positions and monitors accounts on a regular basis, but generally does not require collateral. Provisions to the allowance for doubtful accounts are made monthly and adjustments are made periodically (as circumstances warrant) based upon management’s best estimate of the collectability of such accounts. The Company writes-off uncollectible trade accounts receivable when the accounts are determined to be uncollectible. No customer represents more than 10% of consolidated sales. We maintain an allowance for losses based upon the expected collectability of accounts receivable. Changes in this allowance for 2015, 2014 and 2013 were as follows: Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ 8,713 $ 8,798 $ 7,204 Charged to costs and expenses 2,014 2,365 2,018 Charged to other accounts 1,255 2 1,140 2 560 2 Deductions (2,618 ) 1 (3,590 ) 1 (984 ) 1 Balance at end of year $ 9,364 $ 8,713 $ 8,798 ( 1) Uncollectible accounts written off, net of recoveries (2) Includes allowance for doubtful accounts from acquisitions |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. USGAAP establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. USGAAP prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. See Note 4 for further information regarding the Company’s financial instruments. |
Inventories | Inventories Inventories consist principally of finished goods and are priced at lower of cost or market, cost being determined using the first-in, first-out (“FIFO”) method. Reserves are provided against inventories for estimated obsolescence based upon the aging of the inventories and market trends and are applied as a reduction in cost of associated inventory. |
Property and Equipment | Property and Equipment Property and equipment are carried on the basis of cost. Depreciation of property and equipment is computed using the straight-line method over their estimated useful lives. Maintenance and repairs of depreciable assets are charged against earnings as incurred. When properties are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and gains or losses are credited or charged to earnings. The principal estimated useful lives used in determining depreciation are as follows: Buildings 20-39 years Building improvements 10-20 years Furniture, fixtures and equipment 3-20 years Leasehold improvements Shorter of estimated useful life or related lease term |
Impairment of Goodwill and Other Intangible Assets | Impairment of Goodwill and Other Intangible Assets The Company tests goodwill and other indefinite lived intangible assets for . The Company assigns the carrying value of these intangible assets to its "reporting units" and applies the test for goodwill at the reporting unit level. A reporting unit is defined as an operating segment or one level below a segment (a "component") if the component is a business and discrete information is prepared and reviewed regularly by segment management. The Company’s goodwill impairment assessment first permits evaluating qualitative factors to determine if a reporting unit's carrying value would more likely than not exceed its fair value. If the Company concludes, based on the qualitative assessment, that a reporting unit's carrying value would more likely than not exceed its fair value, the Company would perform a two-step quantitative test for that reporting unit. When a quantitative assessment is performed, the first step is to identify a potential impairment, and the second step measures the amount of the impairment loss, if any. Goodwill is deemed to be impaired if the carrying amount of a reporting unit’s goodwill exceeds its estimated fair value. During the third and fourth quarter of 2015, DXP performed interim impairment tests using a quantitative approach and recognized goodwill impairments of $57.8 million and $9.8 million, respectively. During the fourth quarter ended December 31, 2014, the Company performed its annual goodwill impairment test using a quantitative approach and recognized a goodwill impairment of $117.6 million (see Note 8). No impairment of goodwill was required in 2013. |
Impairment of Long-Lived Assets, Excluding Goodwill | Impairment of Long-Lived Assets, Excluding Goodwill The Company tests long-lived assets or asset groups for recoverability on an annual basis and when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. |
Share-based Compensation | Share-based Compensation The Company uses restricted stock for share-based compensation programs. The Company measures compensation cost with respect to equity instruments granted as stock-based payments to employees based upon the estimated fair value of the equity instruments at the date of the grant. The cost as measured is recognized as expense over the period which an employee is required to provide services in exchange for the award. |
Revenue Recognition | Revenue Recognition For binding agreements to fabricate tangible assets to customer specifications, the Company recognizes revenues using the percentage of completion method. Under this method, revenues are recognized as costs are incurred and include estimated profits calculated on the basis of the relationship between costs incurred and total estimated costs at completion. If at any time expected costs exceed the value of the contract, the loss is recognized immediately. Revenues of approximately $47.5 million, $65.9 million, and $12.7 million were recognized on contracts in process for the years ended December 31, 2015, 2014, and 2013, respectively. The typical time span of these contracts is approximately one to two years. For other sales, the Company recognizes revenues when an agreement is in place, the price is fixed, title for product passes to the customer or services have been provided and collectability is reasonably assured. Revenues are recorded net of sales taxes. The Company reserves for potential customer returns based upon the historical level of returns |
Shipping and Handling Costs | Shipping and Handling Costs The Company classifies shipping and handling charges billed to customers as sales. Shipping and handling charges paid to others are classified as a component of cost of sales. |
Self-insured Insurance and Medical Claims | Self-insured Insurance and Medical Claims We generally retain up to $100,000 of risk for each claim for workers compensation, general liability, automobile and property loss. We accrue for the estimated loss on the self-insured portion of these claims. The accrual is adjusted quarterly based upon reported claims information. The actual cost could deviate from the recorded estimate. We generally retain up to $250,000 of risk on each medical claim for our employees and their dependents. We accrue for the estimated outstanding balance of unpaid medical claims for our employees and their dependents. The accrual is adjusted monthly based on recent claims experience. The actual claims could deviate from recent claims experience and be materially different from the reserve. The accrual for these claims at December 31, 2015 and 2014 was approximately $3.4 million and $2.9 million, respectively. |
Purchase Accounting | Purchase Accounting DXP estimates the fair value of assets, including property, machinery and equipment and their related useful lives and salvage values, intangibles and liabilities when allocating the purchase price of an acquisition. The fair value estimates are developed using the best information available. Third party valuation specialists assist in valuing the Company’s significant acquisitions. |
Cost of Sales and Selling, General and Administrative Expense | Cost of Sales and Selling, General and Administrative Expense Cost of sales includes product and product related costs, inbound freight charges, internal transfer costs and depreciation. Selling, general and administrative expense includes purchasing and receiving costs, inspection costs, warehousing costs, depreciation and amortization. |
Debt Issuance Cost Amortization | Debt Issuance Cost Amortization Fees paid to DXP’s lender to secure a firm commitment on a term loan and revolving line of credit are presented as a direct deduction from the carrying amount of the debt liability. For the term loan, fees paid by DXP are amortized over the life of the loan as additional interest. Fees paid to secure a firm commitment from our lender on a revolving line of credit are amortized on a straight-line basis over the entire term of the arrangement. The total unamortized debt issuance costs reported on the consolidated balance sheets as of December 31, 2015 and 2014 was $2.0 million and $2.7 million, respectively. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and income tax bases of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established to reduce deferred income tax assets to the amounts expected to be realized under a more likely than not criterion. |
Comprehensive Income | Comprehensive Income Comprehensive income includes net income, foreign currency translation adjustments, unrecognized gains (losses) on postretirement and other employment-related plans, changes in fair value of certain derivatives, and unrealized gains and losses on certain investments in debt and equity securities. The Company’s other comprehensive (loss) income is comprised of changes in the market value of an investment with quoted market prices in an active market for identical instruments and translation adjustments from translating foreign subsidiaries to the reporting currency. |
Accounting for Uncertainty in Income Taxes | Accounting for Uncertainty in Income Taxes A position taken or expected to be taken in a tax return is recognized in the financial statements when it is more likely than not (i.e. a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U. S. federal, state and local tax examination by tax authorities for years prior to 2009. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES [Abstract] | |
Schedule of Changes in Allowance | Changes in this allowance for 2015, 2014 and 2013 were as follows: Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ 8,713 $ 8,798 $ 7,204 Charged to costs and expenses 2,014 2,365 2,018 Charged to other accounts 1,255 2 1,140 2 560 2 Deductions (2,618 ) 1 (3,590 ) 1 (984 ) 1 Balance at end of year $ 9,364 $ 8,713 $ 8,798 ( 1) Uncollectible accounts written off, net of recoveries (2) Includes allowance for doubtful accounts from acquisitions |
Principal Estimated Useful Lives Used in Determining Depreciation | The principal estimated useful lives used in determining depreciation are as follows: Buildings 20-39 years Building improvements 10-20 years Furniture, fixtures and equipment 3-20 years Leasehold improvements Shorter of estimated useful life or related lease term |
FAIR VALUE OF FINANCIAL ASSET31
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES [Abstract] | |
Changes in Level 1 Assets | The following table presents the changes in Level 1 assets for the period indicated ( in thousands Years Ended December 31, 2015 2014 Fair value at beginning of period $ $ 1,837 Investment during period - - Realized and unrealized gains (losses) included in other comprehensive income (149 ) Proceeds on sale of investment (1,688 ) Fair value at end of period $ - $ - |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INVENTORY [Abstract] | |
Carrying Values of Inventories | The carrying values of inventories are as follows ( in thousands December 31, 2015 December 31, 2014 Finished goods $ 94,524 $ 99,732 Work in process 9,295 15,926 Inventories $ 103,819 $ 115,658 |
COSTS AND ESTIMATED EARNINGS 33
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS [Abstract] | |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts | Costs and estimated earnings on uncompleted contracts and related amounts billed for 2015 and 2014 were as follows (in thousands): Year Ended December 31, 2015 2014 Costs incurred on uncompleted contracts $ 34,400 $ 49,133 Estimated earnings, thereon 13,119 16,749 Total 47,519 65,882 Less: billings to date 33,422 54,701 Net $ 14,097 $ 11,181 |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Balance Sheet | Such amounts were included in the accompanying Consolidated Balance Sheets for 2015 and 2014 under the following captions (in thousands): Year Ended December 31, 2015 2014 Costs and estimated earnings in excess of billings on uncompleted contracts $ 22,045 $ 20,083 Billings in excess of costs and estimated earnings on uncompleted contracts (8,021 ) (8,840 ) Translation Adjustment 73 (62 ) Net $ 14,097 $ 11,181 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT [Abstract] | |
Property and Equipment | The carrying values of property and equipment are as follows ( in thousands December 31, 2015 December 31, 2014 Land $ 2,386 $ 2,386 Buildings and leasehold improvements 16,631 13,490 Furniture, fixtures and equipment 102,494 97,829 Less – Accumulated depreciation (53,008 ) (43,726 ) Total Property and Equipment $ 68,503 $ 69,979 |
GOODWILL AND OTHER INTANGIBLE35
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
Goodwill and Other Intangible Assets | The following table presents the changes in the carrying amount of goodwill and other intangible assets during the year ended December 31, 2015 ( in thousands Goodwill Other Intangible Assets Total Balance as of December 31, 2014 $ 253,312 $ 130,333 $ 383,645 Acquired during the period 11,713 7,263 18,976 Impairment (67,663 ) (1,072 ) (68,735 ) Translation adjustment - (3,606 ) (3,606 ) Amortization - (20,621 ) (20,621 ) Balance as of December 31, 2015 $ 197,362 $ 112,297 $ 309,659 The following table presents the changes in the carrying amount of goodwill and other intangible assets during the year ended December 31, 2014 ( in thousands Goodwill Other Intangible Assets Total Balance as of December 31, 2013 $ 188,110 $ 69,722 $ 257,832 Acquired during the period 182,771 85,264 268,035 Impairment (117,569 ) - (117,569 ) Translation adjustment - (2,173 ) (2,173 ) Amortization - (22,480 ) (22,480 ) Balance as of December 31, 2014 $ 253,312 $ 130,333 $ 383,645 |
Goodwill Balance by Reportable Segment | The following table presents goodwill balance by reportable segment as of December 31, 2015 and 2014 (in thousands) As of December 31, 2015 2014 Service Centers $ 164,244 $ 167,302 Innovative Pumping Solutions 15,980 68,872 Supply Chain Services 17,138 17,138 Total $ 197,362 $ 253,312 |
Amortizable Other Intangible Assets | The following table presents a summary of amortizable other intangible assets ( in thousands As of December 31, 2015 As of December 31, 2014 Gross Carrying Amount Accumulated Amortization Carrying Amount, net Gross Carrying Amount Accumulated Amortization Carrying Amount, net Vendor agreements $ 2,496 $ (2,496 ) $ - $ 2,496 $ (1,330 ) $ 1,166 Customer relationships 195,580 (83,741 ) 111,839 192,512 (63,957 ) 128,555 Non-compete agreements 1,815 (1,357 ) 458 1,737 (1,125 ) 612 Total $ 199,891 $ (87,594 ) $ 112,297 $ 196,745 $ (66,412 ) $ 130,333 |
Estimated Future Annual Amortization of Intangible Assets | The estimated future annual amortization of intangible assets for each of the next five years and thereafter are as follows (in thousands) 2016 $ 18,161 2017 17,304 2018 15,657 2019 14,212 2020 10,778 Thereafter 36,185 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
LONG-TERM DEBT [Abstract] | |
Long Term Debt | Long-term debt consisted of the following ( in thousands December 31, 2015 2014 Line of credit $ 172,147 $ 193,443 Term loan 175,000 212,500 Promissory note payable in monthly installments at 2.9% through January 2021, collateralized by equipment 4,408 5,216 Unsecured subordinated notes payable in quarterly installments at 5% - 357 Less unamortized debt issuance costs (2,046 ) (2,714 ) Total Debt 349,509 408,802 Less: Current maturities (50,829 ) (38,608 ) Total Long-term Debt $ 298,680 $ 370,194 |
Computation of the Leverage Ratio | The following table sets forth the computation of the Leverage Ratio as of December 31, 2015 ( in thousands, except for ratios For the Twelve Months ended December 31, 2015 Leverage Ratio Loss before taxes $ (38,920 ) Loss attributable to noncontrolling interest 813 Interest expense 10,932 Depreciation and amortization 33,243 Impairment expense 68,735 Stock compensation expense 2,973 Pro forma acquisition EBITDA 2,244 B27 settlment 7,348 (A) $ 87,368 As of December 31, 2015 Total long-term debt, including current maturities $ 349,509 Unamortized debt issuance costs 2,046 (B) $ 351,555 Leverage Ratio (B)/(A) 4.02 |
Computation of the fixed charge coverage ratio | The following table sets forth the computation of the Fixed Charge Coverage Ratio as of December 31, 2015 ( in thousands, except for ratios For the Twelve Months ended December 31, 2015 Defined EBITDA $ 87,368 Cash paid for income taxes 13,792 Capital expenditures 13,992 (A) $ 59,584 Cash interest payments $ 9,721 Dividends 90 Scheduled principal payments 38,666 (B) $ 48,477 Fixed Charge Coverage Ratio (A)/(B) 1.23 |
Computation of the Asset Coverage Ratio | The following table sets forth the computation of the Asset Coverage Ratio as of December 31, 2015 ( in thousands, except for ratios Credit facility outstanding balance $ 172,147 Outstanding letters of credit 6,305 Defined indebtedness $ 178,452 Accounts receivable (net), valued at 85% of gross $ 138,486 Inventory, valued at 65% of gross 67,482 $ 205,968 Asset Coverage Ratio 1.15 |
Maturities of Long-Term Debt | As of December 31, 2015, the maturities of long-term debt for the next five years and thereafter were as follows ( in thousands 2016 $ 50,829 2017 63,356 2018 63,381 2019 173,055 2020 934 Thereafter - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
Income Before Income Taxes | The components of income before income taxes are as follows ( in thousands Years Ended December 31, 2015 2014 2013 Domestic $ (42,179 ) $ (21,349 ) $ 86,567 Foreign 3,259 (4,207 ) 8,150 Total income before taxes $ (38,920 ) $ (25,556 ) $ 94,717 |
Provision for Income Taxes | The provision for income taxes consists of the following ( in thousands Years Ended December 31, 2015 2014 2013 Current - Federal $ 5,182 $ 24,050 $ 21,481 State 1,499 5,604 2,681 Foreign 2,493 2,150 7,484 9,174 31,804 31,646 Deferred - Federal (7,090 ) (10,544 ) 8,631 State - (1,769 ) 167 Foreign (1,934 ) 191 (5,964 ) (9,024 ) (12,122 ) 2,834 $ 150 $ 19,682 $ 34,480 |
Difference between Income Taxes Computed at the Federal Statutory Income Tax Rate and the Provision for Income Taxes | The difference between income taxes computed at the federal statutory income tax rate (35%) and the provision for income taxes is as follows ( in thousands Years Ended December 31, 2015 2014 2013 Income taxes computed at federal statutory rate $ (13,622 ) $ (8,945 ) $ 33,150 State income taxes, net of federal benefit 974 2,492 1,852 Non-tax deductible impairment expense computed at federal statutory rate 15,765 24,444 - Foreign adjustment 689 1,353 - Meals and entertainment 620 801 561 Domestic Production Activity Deduction (1,143 ) (1,040 ) (566 ) Research and development tax credit (1,730 ) (587 ) - Foreign tax credit (921 ) (343 ) - Other, primarily non-tax deductible, or non-taxable items (482 ) 1,507 (517 ) $ 150 $ 19,682 $ 34,480 |
Net Current and Noncurrent Components of Deferred Income Tax Balances | The net current and noncurrent components of deferred income tax balances are as follows ( in thousands December 31, 2015 2014 Net current assets $ 8,996 $ 8,250 Net non-current liabilities (6,312 ) (21,284 ) Net assets (liabilities) $ 2,684 $ (13,034 ) Deferred tax liabilities and assets were comprised of the following ( in thousands December 31, 2015 2014 Deferred tax assets: Goodwill $ 23,334 $ 17,906 Allowance for doubtful accounts 2,692 2,979 Inventories 3,312 2,691 Accruals 2,354 2,125 Other 730 990 Total deferred tax assets 32,422 26,691 Deferred tax liabilities Intangibles (27,512 ) (33,874 ) Property and equipment (10,824 ) (10,343 ) Unremitted foreign earnings (259 ) (52 ) Cumulative translation adjustment 8,605 4,014 Other 252 530 Net deferred tax asset (liability) $ 2,684 $ (13,034 ) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED COMPENSATION [Abstract] | |
Employee and Non-employee Restricted Stock Plan | The following table provides certain information regarding the shares authorized and outstanding under the Restricted Stock Plan at December 31, 2015: Number of shares authorized for grants 800,000 Number of shares granted (862,349 ) Number of shares forfeited 143,876 Number of shares available for future grants 81,527 Weighted-average grant price of granted shares $ 28.21 |
Changes in Non-vested Restricted Stock | Changes in restricted stock for the twelve months ended December 31, 2015 were as follows: Number of Shares Weighted Average Grant Price Non-vested at December 31, 2014 179,942 $ 52.71 Granted 24,971 $ 40.95 Forfeited (20,855 ) $ 41.34 Vested (57,401 ) $ 44.99 Non-vested at December 31, 2015 126,657 $ 55.54 |
EARNINGS PER SHARE DATA (Tables
EARNINGS PER SHARE DATA (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE DATA [Abstract] | |
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 December 31, 2015 2014 2013 Basic: Weighted average shares outstanding 14,423 14,639 14,439 Net income (loss) attributable to DXP Enterprises, Inc. $ (38,536 ) $ (45,238 ) $ 60,237 Convertible preferred stock dividend (90 ) (90 ) (90 ) Net income (loss) attributable to common shareholders $ (38,626 ) $ (45,328 ) $ 60,147 Per share amount $ (2.68 ) $ (3.10 ) $ 4.17 Diluted: Weighted average shares outstanding 14,423 14,639 14,439 Assumed conversion of convertible preferred stock - - 840 Total dilutive shares 14,423 14,639 15,279 Net income (loss) attributable to common shareholders $ (38,626 ) $ (45,328 ) $ 60,147 Convertible preferred stock dividend - - 90 Net income (loss) attributable to DXP Enterprises, Inc. for diluted earnings per share $ (38,626 ) $ (45,328 ) $ 60,237 Per share amount $ (2.68 ) $ (3.10 ) $ 3.94 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
BUSINESS ACQUISITIONS [Abstract] | |
Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed during 2015 and 2014 in connection with the acquisitions described above ( in thousands 2015 2014 TSI CORTECH B27 MT&S Cash $ - $ - $ 2,538 $ 806 Accounts Receivable, net 442 2,293 51,448 5,656 Inventory 475 1,243 6,472 2,522 Property and equipment 42 253 14,573 557 Goodwill and intangibles 1 4,929 14,048 259,412 8,405 Other assets 100 21 1,791 59 Assets acquired 5,988 17,858 336,234 18,005 Current liabilities assumed (335 ) (2,610 ) (26,690 ) (3,336 ) Non-current liabilities assumed 2 (653 ) (349 ) (15,992 ) - Net assets acquired $ 5,000 $ 14,899 $ 293,552 $ 14,669 (1) The amounts in the table above have not been reduced by the $105.3 million, or the $67.7 million, of goodwill impairment charges for B27 recorded in the fourth quarter of 2014 and the second half of 2015, respectively. (2) Includes deferred tax liability of $0.6 million and $16.0 million related to intangible assets acquired for 2015 and 2014, respectively. |
Pro Forma Unaudited Results of Operations | The pro forma unaudited results of operations for the Company on a consolidated basis for the twelve months ended December 31, 2015 and 2014, assuming the acquisition of businesses completed in 2015 and 2014 (previously discussed in Item 1, Business in millions, except per share amounts Years Ended December 31, 2015 2014 Net sales $ 1,263 $ 1,541 Net income (loss) attributable to DXP Enterprises, Inc. $ (37 ) $ (44 ) Per share data attributable to DXP Enterprises, Inc. Basic earnings (loss) $ (2.60 ) $ (2.99 ) Diluted earnings (loss) $ (2.60 ) $ (2.99 ) The pro forma unaudited results of operations for the Company on a consolidated basis for the twelve months ended December 31, 2014 and 2013, assuming the acquisition of businesses completed in 2014 and 2013 (previously discussed in Item 1, Business in millions, except per share amounts Years Ended December 31, 2014 2013 Net sales $ 1,513 $ 1,496 Net income (loss) $ (45 ) $ 71 Per share data Basic earnings (loss) $ (3.08 ) $ 4.90 Diluted earnings (loss) $ (3.08 ) $ 4.64 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Future Minimum Rental Commitments for Non-cancelable Leases | The future minimum rental commitments as of December 31, 2015, for non-cancelable leases are as follows ( in thousands 2016 $ 23,951 2017 19,215 2018 12,676 2019 7,497 2020 4,058 Thereafter 9,861 |
SEGMENT AND GEOGRAPHICAL REPO42
SEGMENT AND GEOGRAPHICAL REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SEGMENT AND GEOGRAPHICAL REPORTING [Abstract] | |
Segment Reporting Financial Information | The following table sets out financial information relating the Company’s segments ( in thousands Years Ended December 31, Service Centers Innovative Pumping Solutions Supply Chain Services Total 2015 Sales $ 826,588 $ 254,829 $ 165,626 $ 1,247,043 Operating income for reportable segments, excluding impairment expense 78,170 21,584 14,213 113,967 Identifiable assets at year end 451,333 159,365 50,012 660,710 Capital expenditures 3,185 8,383 604 12,172 Depreciation 7,734 2,930 227 10,891 Amortization 10,334 8,406 1,881 20,621 Interest expense 2,967 6,881 1,084 10,932 Impairment expense by segment 15,842 52,893 - 68,735 2014 Sales $ 987,561 $ 348,134 $ 163,967 $ 1,499,662 Operating income for reportable segments, excluding impairment expense 107,699 51,162 13,794 172,655 Identifiable assets at year end 568,182 202,228 54,637 825,047 Capital expenditures 4,100 4,043 122 8,265 Depreciation 8,416 2,381 397 11,194 Amortization 11,281 8,993 2,206 22,480 Interest expense 3,422 8,451 924 12,797 Impairment expense by segment 10,210 107,359 - 117,569 2013 Sales $ 884,821 $ 209,175 $ 147,514 $ 1,241,510 Operating income for reportable segments 107,142 33,766 12,490 153,398 Identifiable assets at year end 500,978 66,007 48,049 615,034 Capital expenditures 6,321 357 206 6,884 Depreciation 7,770 446 366 8,582 Amortization 8,574 1,043 2,213 11,830 |
Reconciliation of Operating Income for Reportable Segments to Consolidated Income before Taxes | Years Ended December 31, 2015 2014 2013 Operating income for reportable segments, excluding impairment expense $ 113,967 $ 172,655 $ 153,398 Adjustments for: B27 settlement 7,348 - - Impairment expense 68,735 117,569 - Amortization of intangibles 20,621 22,480 11,830 Corporate and other expense, net 45,179 45,234 40,644 Total operating income (loss) (27,916 ) (12,628 ) 100,924 Interest expense 10,932 12,797 6,282 Other expenses (income), net 72 131 (75 ) Income (loss) before income taxes $ (38,920 ) $ (25,556 ) $ 94,717 |
Schedule of Revenue by Geographic Area | The Company’s revenues and property and equipment by geographical location are as follows (in thousands) Years Ended December 31, 2015 2014 2013 Revenues United States $ 1,119,210 $ 1,300,493 $ 1,075,962 Canada 127,833 195,633 165,548 Other - 3,536 - Total $ 1,247,043 $ 1,499,662 $ 1,241,510 |
Schedule of Property and Equipment by Geographical Areas | As of December 31, 2015 2014 Property and Equipment, net United States $ 53,695 $ 49,013 Canada 14,724 20,966 Dubai 84 - Total $ 68,503 $ 69,979 |
QUARTERLY FINANCIAL INFORMATI43
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) [Abstract] | |
Summarized Quarterly Financial Information | Summarized quarterly financial information for the years ended December 31, 2015, 2014 and 2013 is as follows ( in millions, except per share data First Quarter (1) Second Quarter (1) Third Quarter (1) Fourth Quarter 2015 Sales $ 341.6 $ 323.7 $ 303.1 $ 278.6 Gross profit 98.1 91.3 85.7 76.9 Impairment expense - - 58.9 9.8 Net income (loss) 9.7 7.2 (52.7 ) (3.2 ) Net income (loss) attributable to DXP Enterprises, Inc. 9.7 7.2 (52.4 ) (3.0 ) Earnings (loss) per share - basic $ 0.67 $ 0.50 $ (3.64 ) $ (0.20 ) Earnings (loss) per share - diluted $ 0.63 $ 0.47 $ (3.64 ) $ (0.20 ) 2014 Sales $ 348.5 $ 381.6 $ 387.0 $ 382.6 Gross profit 101.7 111.0 113.4 106.7 Impairment expense - - - 117.6 Net income (loss) 10.9 14.9 17.0 (88.1 ) Earnings (loss) per share - basic $ 0.74 $ 1.01 $ 1.16 $ (6.09 ) Earnings (loss) per share - diluted $ 0.70 $ 0.96 $ 1.10 $ (6.09 ) 2013 Sales $ 290.1 $ 307.9 $ 329.7 $ 313.8 Gross profit 89.1 91.5 97.1 94.6 Net income 13.2 13.7 16.4 16.9 Earnings per share - basic $ 0.92 $ 0.95 $ 1.13 $ 1.17 Earnings per share - diluted $ 0.87 $ 0.90 $ 1.07 $ 1.10 The sum of the individual quarterly earnings per share amounts may not agree with year-to-date earnings per share as each quarter’s computation is based on the weighted average number of shares outstanding during the quarter, the weighted average stock price during the quarter and the dilutive effects of the stock options and restricted stock in each quarter. (1) During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. The first three quarters of 2014 were revised as follows: Previously Reported First Quarter Adjusted First Quarter Previously Reported Second Quarter Adjusted Second Quarter Previously Reported Third Quarter Adjusted Third Quarter Sales $ 348.5 $ 348.5 $ 381.6 $ 381.6 $ 387.0 $ 387.0 Gross profit 101.7 101.7 111.0 111.0 113.4 113.4 Net income (loss) 11.6 10.9 15.5 14.9 17.6 17.0 Earnings (loss) per share Basic $ 0.79 $ 0.74 $ 1.06 $ 1.01 $ 1.20 $ 1.16 Diluted $ 0.75 $ 0.70 $ 1.00 $ 0.96 $ 1.14 $ 1.10 |
THE COMPANY (Details)
THE COMPANY (Details) | 12 Months Ended |
Dec. 31, 2015Segment | |
THE COMPANY [Abstract] | |
Number of segments | 3 |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | [1] | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | [1] | Jun. 30, 2014 | [1] | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | [1] | Jun. 30, 2013 | [1] | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||
Ownership percentage in VIE | 47.50% | ||||||||||||||||||||||||
Assets of VIE | $ 4,000,000 | $ 4,000,000 | |||||||||||||||||||||||
Increase cost of sales from consolidation of the VIE | 1,400,000 | ||||||||||||||||||||||||
Income tax benefit of VIE | 300,000 | ||||||||||||||||||||||||
Out-of-Period Items [Abstract] | |||||||||||||||||||||||||
Selling, general and administrative expense | 303,819,000 | $ 327,899,000 | $ 271,421,000 | ||||||||||||||||||||||
Provision for income taxes | 150,000 | 19,682,000 | 34,480,000 | ||||||||||||||||||||||
Net income (loss) | $ (3,200,000) | $ (52,700,000) | [1] | $ 7,200,000 | $ 9,700,000 | [1] | $ (88,100,000) | $ 17,000,000 | $ 14,900,000 | $ 10,900,000 | [1] | $ 16,900,000 | $ 16,400,000 | $ 13,700,000 | $ 13,200,000 | [1] | $ (39,070,000) | $ (45,238,000) | $ 60,237,000 | ||||||
Basic earnings (loss) per share (in dollars per share) | $ (0.20) | $ (3.64) | [1] | $ 0.50 | $ 0.67 | [1] | $ (6.09) | $ 1.16 | $ 1.01 | $ 0.74 | [1] | $ 1.17 | $ 1.13 | $ 0.95 | $ 0.92 | [1] | $ (2.68) | $ (3.10) | $ 4.17 | ||||||
Diluted earnings (loss) per share (in dollars per share) | $ (0.20) | $ (3.64) | [1] | $ 0.47 | $ 0.63 | [1] | $ (6.09) | $ 1.10 | $ 0.96 | $ 0.70 | [1] | $ 1.10 | $ 1.07 | $ 0.90 | $ 0.87 | [1] | $ (2.68) | $ (3.10) | $ 3.94 | ||||||
Changes in allowance [Roll Forward] | |||||||||||||||||||||||||
Balance at beginning of year | $ 8,713,000 | $ 8,798,000 | $ 7,204,000 | $ 8,713,000 | $ 8,798,000 | $ 7,204,000 | |||||||||||||||||||
Charged to cost and expenses | 2,014,000 | 2,365,000 | 2,018,000 | ||||||||||||||||||||||
Charged to other accounts | [2] | 1,255,000 | 1,140,000 | 560,000 | |||||||||||||||||||||
Deductions | [3] | (2,618,000) | (3,590,000) | (984,000) | |||||||||||||||||||||
Balance at end of year | $ 9,364,000 | $ 8,713,000 | $ 8,798,000 | 9,364,000 | 8,713,000 | 8,798,000 | |||||||||||||||||||
Goodwill [Line Items] | |||||||||||||||||||||||||
Impairment of goodwill | 9,800,000 | $ 58,900,000 | [1] | $ 0 | 0 | [1] | 117,600,000 | $ 0 | $ 0 | $ 0 | [1] | 67,663,000 | 117,569,000 | ||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||
Revenues recognized on contracts in process | $ 47,500,000 | 65,900,000 | 12,700,000 | ||||||||||||||||||||||
Minimum contract period | 1 year | ||||||||||||||||||||||||
Maximum contract period | 2 years | ||||||||||||||||||||||||
Self-insured Insurance and Medical Claims [Abstract] | |||||||||||||||||||||||||
Workers compensation insurance reserves, per claim | 100,000 | $ 100,000 | |||||||||||||||||||||||
Medical insurance reserves, per claim | 250,000 | 250,000 | |||||||||||||||||||||||
Accrual for claims | 3,400,000 | 2,900,000 | 3,400,000 | 2,900,000 | |||||||||||||||||||||
Debt Issuance Cost Amortization [Abstract] | |||||||||||||||||||||||||
Total unamortized debt issuance costs | 2,046,000 | 2,714,000 | $ 2,046,000 | $ 2,714,000 | |||||||||||||||||||||
Executive Officers and Other Employees of DXP [Member] | |||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||
Ownership percentage in VIE | 52.50% | ||||||||||||||||||||||||
Buildings [Member] | Minimum [Member] | |||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||
Estimated useful life | 20 years | ||||||||||||||||||||||||
Buildings [Member] | Maximum [Member] | |||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||
Estimated useful life | 39 years | ||||||||||||||||||||||||
Building Improvements [Member] | Minimum [Member] | |||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||
Estimated useful life | 10 years | ||||||||||||||||||||||||
Building Improvements [Member] | Maximum [Member] | |||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||
Estimated useful life | 20 years | ||||||||||||||||||||||||
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | |||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||
Estimated useful life | 3 years | ||||||||||||||||||||||||
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | |||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||
Estimated useful life | 20 years | ||||||||||||||||||||||||
Leasehold Improvements [Member] | |||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||
Estimated useful life | Shorter of estimated useful life or related lease term | ||||||||||||||||||||||||
Overstatement of Accrual at December 31, 2014 [Member] | |||||||||||||||||||||||||
Out-of-Period Items [Abstract] | |||||||||||||||||||||||||
Selling, general and administrative expense | 2,500,000 | ||||||||||||||||||||||||
Out-of-period adjustment, net of tax | $ 1,600,000 | ||||||||||||||||||||||||
Provision for income taxes | 1,500,000 | ||||||||||||||||||||||||
Net income (loss) | $ 3,100,000 | ||||||||||||||||||||||||
Basic earnings (loss) per share (in dollars per share) | $ (0.21) | ||||||||||||||||||||||||
Diluted earnings (loss) per share (in dollars per share) | $ (0.21) | ||||||||||||||||||||||||
Cash [Member] | |||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||
Assets of VIE | 300,000 | $ 300,000 | |||||||||||||||||||||||
Fixed Assets [Member] | |||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||
Assets of VIE | 3,600,000 | $ 3,600,000 | |||||||||||||||||||||||
Goodwill [Member] | |||||||||||||||||||||||||
Goodwill [Line Items] | |||||||||||||||||||||||||
Impairment of goodwill | $ 9,800,000 | $ 57,800,000 | $ 117,600,000 | $ 0 | |||||||||||||||||||||
[1] | During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. | ||||||||||||||||||||||||
[2] | Includes allowance for doubtful accounts from acquisitions | ||||||||||||||||||||||||
[3] | Uncollectible accounts written off, net of recoveries |
FAIR VALUE OF FINANCIAL ASSET46
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | [1] | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | [1] | Jun. 30, 2014 | [1] | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Proceeds on sale of investment | $ 0 | $ (1,688) | $ 68 | ||||||||||||||
Loss on sale of investments | 100 | ||||||||||||||||
Impairment expense | $ 9,800 | $ 58,900 | [1] | $ 0 | $ 0 | [1] | $ 117,600 | $ 0 | $ 0 | $ 0 | [1] | 67,663 | 117,569 | ||||
Level 1 [Member] | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Fair value at beginning of period | $ 0 | $ 1,837 | 0 | 1,837 | |||||||||||||
Investment during period | 0 | 0 | |||||||||||||||
Realized and unrealized gains (losses) included in other comprehensive income | 0 | (149) | |||||||||||||||
Proceeds on sale of investment | 0 | (1,688) | |||||||||||||||
Fair value at end of period | 0 | 0 | $ 0 | 0 | $ 1,837 | ||||||||||||
Payment for investment | $ 1,700 | ||||||||||||||||
Level 3 [Member] | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Impairment expense | $ 9,800 | $ 57,800 | $ 117,600 | ||||||||||||||
Level 3 [Member] | Maximum [Member] | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Estimated future cash flows, discount rate | 11.50% | 11.50% | 13.50% | ||||||||||||||
Level 3 [Member] | Minimum [Member] | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Estimated future cash flows, discount rate | 10.00% | 10.00% | 10.00% | ||||||||||||||
[1] | During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
INVENTORY [Abstract] | ||
Finished goods | $ 94,524 | $ 99,732 |
Work in process | 9,295 | 15,926 |
Inventories | $ 103,819 | $ 115,658 |
COSTS AND ESTIMATED EARNINGS 48
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of costs and estimated earnings on uncompleted contracts [Abstract] | ||
Costs incurred on uncompleted contracts | $ 34,400 | $ 49,133 |
Estimated earnings, thereon | 13,119 | 16,749 |
Total | 47,519 | 65,882 |
Less: billings to date | 33,422 | 54,701 |
Net | 14,097 | 11,181 |
Schedule of costs and estimated earnings on uncompleted contracts included in balance sheet [Abstract] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | 22,045 | 20,083 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (8,021) | (8,840) |
Translation Adjustment | 73 | (62) |
Net | $ 14,097 | $ 11,181 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Less - Accumulated depreciation | $ (53,008) | $ (43,726) | |
Total property and equipment | 68,503 | 69,979 | |
Depreciation expense | 12,622 | 12,598 | $ 9,830 |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,386 | 2,386 | |
Buildings and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 16,631 | 13,490 | |
Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 102,494 | $ 97,829 |
GOODWILL AND OTHER INTANGIBLE50
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | [1] | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | [1] | Jun. 30, 2014 | [1] | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||||||||||
Accumulated impairment of goodwill | $ 12,300 | $ 12,300 | $ 12,300 | |||||||||||||||
Impairment expense of write off an acquired intangible asset | $ 1,100 | 1,072 | $ 0 | |||||||||||||||
Remaining intangible asset value of vendor distribution agreements | 0 | 0 | 0 | |||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Beginning balance | $ 253,312 | $ 188,110 | 253,312 | 188,110 | ||||||||||||||
Acquired during the year | 11,713 | 182,771 | ||||||||||||||||
Impairment | (9,800) | (58,900) | [1] | $ 0 | 0 | [1] | $ (117,600) | $ 0 | $ 0 | 0 | [1] | (67,663) | (117,569) | |||||
Translation adjustment | 0 | 0 | ||||||||||||||||
Ending balance | 197,362 | 253,312 | 197,362 | 197,362 | 253,312 | $ 188,110 | ||||||||||||
Other Intangibles Assets [Roll Forward] | ||||||||||||||||||
Balance at beginning of period | 130,333 | 69,722 | 130,333 | 69,722 | ||||||||||||||
Acquired during the year | 7,263 | 85,264 | ||||||||||||||||
Impairment | $ (1,100) | (1,072) | 0 | |||||||||||||||
Translation adjustment | (3,606) | (2,173) | ||||||||||||||||
Amortization | (20,621) | (22,480) | (11,830) | |||||||||||||||
Balance at end of period | 112,297 | 130,333 | 112,297 | 112,297 | 130,333 | 69,722 | ||||||||||||
Total Goodwill and Intangible Assets [Roll Forward] | ||||||||||||||||||
Beginning Balance | 383,645 | $ 257,832 | 383,645 | 257,832 | ||||||||||||||
Acquired during the year | 18,976 | 268,035 | ||||||||||||||||
Impairment | (68,735) | (117,569) | 0 | |||||||||||||||
Translation adjustment | (3,606) | (2,173) | ||||||||||||||||
Amortization | (20,621) | (22,480) | (11,830) | |||||||||||||||
Ending Balance | 309,659 | 383,645 | 309,659 | 309,659 | 383,645 | 257,832 | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||||||
Gross carrying amount | 199,891 | 196,745 | 199,891 | 199,891 | 196,745 | |||||||||||||
Accumulated amortization | (87,594) | (66,412) | (87,594) | (87,594) | (66,412) | |||||||||||||
Carrying amount, net | $ 112,297 | $ 130,333 | $ 112,297 | 112,297 | 130,333 | |||||||||||||
Amortization expense | $ 20,621 | 22,480 | $ 11,830 | |||||||||||||||
Percentage of decrease in common stock | 16.00% | 40.00% | 16.00% | 16.00% | ||||||||||||||
Percentage on decrease in price of crude oil | 18.00% | 20.00% | 18.00% | 18.00% | ||||||||||||||
The estimated future annual amortization of intangible assets for each of the next five years and thereafter [Abstract] | ||||||||||||||||||
2,016 | $ 18,161 | $ 18,161 | $ 18,161 | |||||||||||||||
2,017 | 17,304 | 17,304 | 17,304 | |||||||||||||||
2,018 | 15,657 | 15,657 | 15,657 | |||||||||||||||
2,019 | 14,212 | 14,212 | 14,212 | |||||||||||||||
2,020 | 10,778 | 10,778 | 10,778 | |||||||||||||||
Thereafter | 36,185 | 36,185 | $ 36,185 | |||||||||||||||
B27, LLC [Member] | ||||||||||||||||||
Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||||||||||
Percentage of goodwill not deductible for tax purpose | 60.00% | 60.00% | ||||||||||||||||
Percentage Goodwill impairment | 40.00% | 40.00% | ||||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Impairment | $ (105,300) | (67,700) | ||||||||||||||||
Service Centers [Member] | ||||||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Beginning balance | 167,302 | $ 167,302 | ||||||||||||||||
Ending balance | 164,244 | 167,302 | 164,244 | 164,244 | 167,302 | |||||||||||||
Service Centers [Member] | B27, LLC [Member] | ||||||||||||||||||
Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||||||||||
Accumulated impairment of goodwill | 25,000 | $ 20,000 | 10,200 | 25,000 | 25,000 | 10,200 | ||||||||||||
Fair value of goodwill | 20,100 | 20,100 | ||||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Beginning balance | 10,300 | |||||||||||||||||
Impairment | (5,000) | (9,800) | (10,200) | |||||||||||||||
Ending balance | 5,300 | 10,300 | 5,300 | 5,300 | ||||||||||||||
Innovative Pumping Solutions [Member] | ||||||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Beginning balance | 68,872 | 68,872 | ||||||||||||||||
Ending balance | 15,980 | 68,872 | 15,980 | 15,980 | 68,872 | |||||||||||||
Innovative Pumping Solutions [Member] | B27, LLC [Member] | ||||||||||||||||||
Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||||||||||
Accumulated impairment of goodwill | 148,000 | 143,100 | 95,100 | 148,000 | 148,000 | 95,100 | ||||||||||||
Fair value of goodwill | 52,900 | 52,900 | ||||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Beginning balance | 4,900 | 148,000 | 148,000 | |||||||||||||||
Impairment | (4,900) | (48,000) | (95,100) | |||||||||||||||
Ending balance | 0 | $ 4,900 | 148,000 | 0 | 0 | 148,000 | ||||||||||||
Innovative Pumping Solutions [Member] | NatPro [Member] | ||||||||||||||||||
Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||||||||||
Accumulated impairment of goodwill | 12,300 | 12,300 | ||||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Impairment | (12,300) | |||||||||||||||||
Supply Chain Services [Member] | ||||||||||||||||||
Goodwill [Roll Forward] | ||||||||||||||||||
Beginning balance | $ 17,138 | 17,138 | ||||||||||||||||
Ending balance | 17,138 | 17,138 | 17,138 | 17,138 | 17,138 | |||||||||||||
Vendor Agreements [Member] | ||||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||||||
Gross carrying amount | 2,496 | 2,496 | 2,496 | 2,496 | 2,496 | |||||||||||||
Accumulated amortization | (2,496) | (1,330) | (2,496) | (2,496) | (1,330) | |||||||||||||
Carrying amount, net | 0 | 1,166 | 0 | 0 | 1,166 | |||||||||||||
Customer Relationships [Member] | ||||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||||||
Gross carrying amount | 195,580 | 192,512 | 195,580 | 195,580 | 192,512 | |||||||||||||
Accumulated amortization | (83,741) | (63,957) | (83,741) | (83,741) | (63,957) | |||||||||||||
Carrying amount, net | 111,839 | 128,555 | 111,839 | $ 111,839 | 128,555 | |||||||||||||
Weighted average remaining estimated life | 9 years 10 months 24 days | |||||||||||||||||
Non-Compete Agreements [Member] | ||||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||||||
Gross carrying amount | 1,815 | 1,737 | 1,815 | $ 1,815 | 1,737 | |||||||||||||
Accumulated amortization | (1,357) | (1,125) | (1,357) | (1,357) | (1,125) | |||||||||||||
Carrying amount, net | $ 458 | $ 612 | $ 458 | $ 458 | $ 612 | |||||||||||||
Weighted average remaining estimated life | 2 years 10 months 24 days | |||||||||||||||||
[1] | During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. |
GOODWILL AND OTHER INTANGIBLE51
GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill balance by reportable segment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Line Items] | |||
Goodwill | $ 197,362 | $ 253,312 | $ 188,110 |
Service Centers [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 164,244 | 167,302 | |
Innovative Pumping Solutions [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 15,980 | 68,872 | |
Supply Chain Services [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 17,138 | $ 17,138 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Borrowings [Abstract] | |||
Less unamortized debt issuance costs | $ (2,046) | $ (2,714) | |
Total Debt | 349,509 | 408,802 | |
Less: Current maturities | (50,829) | (38,608) | |
Total Long-term Debt | 298,680 | 370,194 | |
Computation of the Leverage Ratio [Abstract] | |||
Loss before taxes | (38,920) | (25,556) | $ 94,717 |
Loss attributable to noncontrolling interest | 813 | ||
Interest expense | 10,932 | 12,797 | 6,282 |
Depreciation and amortization | 33,243 | ||
Impairment expense | 68,735 | 117,569 | 0 |
Stock compensation expense | 2,973 | ||
Pro forma acquisition EBITDA | 2,244 | ||
B27 settlement | 7,348 | 0 | 0 |
(A) Defined EBITDA | 87,368 | ||
Total long-term debt, including current maturities | 349,509 | 408,802 | |
Less unamortized debt issuance costs | 2,046 | 2,714 | |
(B) Defined indebtedness | $ 351,555 | ||
Leverage Ratio (B)/(A) | 4.02 | ||
Computation of Fixed Charge Coverage Ratio [Abstract] | |||
Defined EBITDA | $ 87,368 | ||
Cash paid for income taxes | 13,792 | 28,784 | 35,697 |
Capital expenditures | 13,992 | ||
(A) Defined EBITDA minus capital expenditures & cash income taxes | 59,584 | ||
Cash interest payments | 9,721 | 11,641 | 5,489 |
Dividends | 90 | 90 | $ 90 |
Scheduled principal payments | 38,666 | ||
(B) Fixed Charges | $ 48,477 | ||
Fixed Charge Coverage Ratio (A)/(B) | 1.23 | ||
Computation of the Asset Coverage Ratio [Abstract] | |||
Credit facility outstanding balance | $ 349,509 | 408,802 | |
Defined indebtedness | $ 178,452 | ||
Percentage of net accounts receivable for calculating asset coverage ratio | 85.00% | ||
Accounts receivable (net), valued at 85% of gross | $ 138,486 | ||
Percentage of net inventory for calculating asset coverage ratio | 65.00% | ||
Inventory, valued at 65% of gross | $ 67,482 | ||
Gross amount utilized for computation of asset coverage ratio | $ 205,968 | ||
Asset Coverage Ratio | 1.15 | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||
2,016 | $ 50,829 | ||
2,017 | 63,356 | ||
2,018 | 63,381 | ||
2,019 | 173,055 | ||
2,020 | 934 | ||
Thereafter | $ 0 | ||
Minimum [Member] | |||
Borrowings [Abstract] | |||
Minimum asset coverage ratio | 1 | ||
Consolidated Fixed Charge Coverage Ratio Covenant [Abstract] | |||
June 30, 2015 through December 31, 2016 | 1.15 | ||
March 31, 2017 and thereafter | 1.25 | ||
Asset coverage ratio current | 1.23 | ||
Maximum [Member] | |||
Consolidated Leverage Ratio Covenant [Abstract] | |||
Through September 30, 2016 | 4.25 | ||
December 31, 2016 | 4 | ||
March 31, 2017 through June 30, 2017 | 3.75 | ||
September 30, 2017 through December 31, 2017 | 3.50 | ||
March 31, 2018 and thereafter | 3.25 | ||
Consolidated leverage ratio current | 4.02 | ||
Consolidated Fixed Charge Coverage Ratio Covenant [Abstract] | |||
June 30, 2015 through December 31, 2016 | 1.15 | ||
March 31, 2017 and thereafter | 1.25 | ||
Line of Credit [Member] | |||
Borrowings [Abstract] | |||
Total Debt | $ 172,147 | 193,443 | |
Computation of the Leverage Ratio [Abstract] | |||
Total long-term debt, including current maturities | 172,147 | 193,443 | |
Computation of the Asset Coverage Ratio [Abstract] | |||
Credit facility outstanding balance | 172,147 | 193,443 | |
Outstanding letters of credit | 6,305 | ||
Term Loan [Member] | |||
Borrowings [Abstract] | |||
Total Debt | 175,000 | 212,500 | |
Computation of the Leverage Ratio [Abstract] | |||
Total long-term debt, including current maturities | 175,000 | 212,500 | |
Computation of the Asset Coverage Ratio [Abstract] | |||
Credit facility outstanding balance | 175,000 | 212,500 | |
Promissory Note Payable [Member] | |||
Borrowings [Abstract] | |||
Total Debt | $ 4,408 | 5,216 | |
Monthly installments | 2.90% | ||
Computation of the Leverage Ratio [Abstract] | |||
Total long-term debt, including current maturities | $ 4,408 | 5,216 | |
Computation of the Asset Coverage Ratio [Abstract] | |||
Credit facility outstanding balance | 4,408 | 5,216 | |
Unsecured Subordinated Notes Payable [Member] | |||
Borrowings [Abstract] | |||
Less unamortized debt issuance costs | (2,046) | (2,714) | |
Total Debt | $ 0 | 357 | |
Quarterly installments | 5.00% | ||
Computation of the Leverage Ratio [Abstract] | |||
Total long-term debt, including current maturities | $ 0 | 357 | |
Less unamortized debt issuance costs | 2,046 | 2,714 | |
Computation of the Asset Coverage Ratio [Abstract] | |||
Credit facility outstanding balance | 0 | $ 357 | |
Wells Fargo Bank, National Association [Member] | Term Loan [Member] | |||
Borrowings [Abstract] | |||
Maximum borrowing capacity | 175,000 | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | |||
Borrowings [Abstract] | |||
Maximum borrowing capacity | $ 350,000 | ||
Commitment fee | 0.40% | ||
Amount outstanding | $ 347,100 | ||
Available for borrowing under the facility | $ 19,800 | ||
Expiration date | Jan. 2, 2019 | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||
Borrowings [Abstract] | |||
Commitment fee | 0.20% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||
Borrowings [Abstract] | |||
Commitment fee | 0.50% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 2.25% | ||
Weighted average interest rate | 2.67% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | LIBOR or CDOR [Member] | Minimum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 1.25% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | LIBOR or CDOR [Member] | Maximum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 2.75% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Prime rate [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 1.25% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Prime rate [Member] | Minimum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 0.25% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Prime rate [Member] | Maximum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 1.75% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components of income before income taxes [Abstract] | |||
Domestic | $ (42,179) | $ (21,349) | $ 86,567 |
Foreign | 3,259 | (4,207) | 8,150 |
Income (loss) before income taxes | (38,920) | (25,556) | 94,717 |
Current [Abstract] | |||
Federal | 5,182 | 24,050 | 21,481 |
State | 1,499 | 5,604 | 2,681 |
Foreign | 2,493 | 2,150 | 7,484 |
Total current | 9,174 | 31,804 | 31,646 |
Deferred [Abstract] | |||
Federal | (7,090) | (10,544) | 8,631 |
State | 0 | (1,769) | 167 |
Foreign | (1,934) | 191 | (5,964) |
Total Deferred | (9,024) | (12,122) | 2,834 |
Total | $ 150 | 19,682 | 34,480 |
Federal statutory income tax rate | 35.00% | ||
The difference between income taxes computed at the federal statutory income tax rate and the provision for income taxes [Abstract] | |||
Income taxes computed at federal statutory rate | $ (13,622) | (8,945) | 33,150 |
State income taxes, net of federal benefit | 974 | 2,492 | 1,852 |
Non-tax deductible impairment expense computed at federal statutory rate | 15,765 | 24,444 | 0 |
Foreign adjustment | 689 | 1,353 | 0 |
Meals and entertainment | 620 | 801 | 561 |
Domestic Production Activity Deduction | (1,143) | (1,040) | (566) |
Research and development tax credit | (1,730) | (587) | 0 |
Foreign tax credit | (921) | (343) | 0 |
Other, primarily non-tax deductible, or non-taxable items | (482) | 1,507 | (517) |
Total | 150 | 19,682 | $ 34,480 |
The net current and noncurrent components of deferred income tax balances [Abstract] | |||
Net current assets | 8,996 | 8,250 | |
Net non-current liabilities | (6,312) | (21,284) | |
Net assets (liabilities) | 2,684 | (13,034) | |
Deferred tax assets [Abstract] | |||
Goodwill | 23,334 | 17,906 | |
Allowance for doubtful accounts | 2,692 | 2,979 | |
Inventories | 3,312 | 2,691 | |
Accruals | 2,354 | 2,125 | |
Other | 730 | 990 | |
Total deferred tax assets | 32,422 | 26,691 | |
Deferred tax liabilities [Abstract] | |||
Intangibles | (27,512) | (33,874) | |
Property and equipment | (10,824) | (10,343) | |
Unremitted foreign earnings | (259) | (52) | |
Cumulative translation adjustment | 8,605 | 4,014 | |
Other | 252 | 530 | |
Net assets (liabilities) | $ 2,684 | $ (13,034) |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized for grants (in shares) | 800,000 | ||
Number of shares granted (in shares) | (862,349) | ||
Number of shares forfeited (in shares) | 143,876 | ||
Number of shares available for future grants (in shares) | 81,527 | ||
Weighted-average grant price of granted shares (in dollars per share) | $ 28.21 | ||
Restricted Stock [Roll Forward] | |||
Granted (in shares) | 862,349 | ||
Forfeited (in shares) | (143,876) | ||
Weighted Average Grant Price [Roll Forward] | |||
Granted (in dollars per share) | $ 28.21 | ||
Stock compensation expense | $ 2,973,000 | $ 3,560,000 | $ 2,832,000 |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentages of vesting for one year | 100.00% | ||
Percentages of vesting for three years | 33.30% | ||
Percentages of vesting for five years | 20.00% | ||
Percentages of vesting for ten years | 10.00% | ||
Numerator used for calculating the number of whole shares granted | $ 75,000 | ||
Award vesting period | 1 year | ||
Number of shares granted (in shares) | (24,971) | ||
Number of shares forfeited (in shares) | 20,855 | ||
Weighted-average grant price of granted shares (in dollars per share) | $ 40.95 | ||
Restricted Stock [Roll Forward] | |||
Non-vested, beginning balance (in shares) | 179,942 | ||
Granted (in shares) | 24,971 | ||
Forfeited (in shares) | (20,855) | ||
Vested (in shares) | (57,401) | ||
Nonvested, ending balance (in shares) | 126,657 | 179,942 | |
Weighted Average Grant Price [Roll Forward] | |||
Non vested, beginning balance (in dollars per share) | $ 52.71 | ||
Granted (in dollars per share) | 40.95 | ||
Forfeitures (in dollars per share) | 41.34 | ||
Vested (in dollars per share) | 44.99 | ||
Nonvested, ending balance (in dollars per share) | $ 55.54 | $ 52.71 | |
Stock compensation expense | $ 3,000,000 | $ 3,600,000 | 2,800,000 |
Related income tax benefit recognized | 1,200,000 | 1,400,000 | $ 1,100,000 |
Unrecognized compensation expense | $ 4,900,000 | $ 6,900,000 | |
Compensation cost not yet recognized, period for recognition | 22 months 27 days |
EARNINGS PER SHARE DATA (Detail
EARNINGS PER SHARE DATA (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | [1] | Jun. 30, 2015 | [1] | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | [1] | Jun. 30, 2014 | [1] | Mar. 31, 2014 | [1] | Dec. 31, 2013 | Sep. 30, 2013 | [1] | Jun. 30, 2013 | [1] | Mar. 31, 2013 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Basic [Abstract] | ||||||||||||||||||||||||
Weighted average shares outstanding (in shares) | 14,423,000 | 14,639,000 | 14,439,000 | |||||||||||||||||||||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (3,000) | $ (52,400) | $ 7,200 | $ 9,700 | $ (38,536) | $ (45,238) | $ 60,237 | |||||||||||||||||
Convertible preferred stock dividend | (90) | (90) | (90) | |||||||||||||||||||||
Net income (loss) attributable to common shareholders | $ (38,626) | $ (45,328) | $ 60,147 | |||||||||||||||||||||
Per share amount (in dollars per share) | $ (0.20) | $ (3.64) | $ 0.50 | $ 0.67 | $ (6.09) | $ 1.16 | $ 1.01 | $ 0.74 | $ 1.17 | $ 1.13 | $ 0.95 | $ 0.92 | $ (2.68) | $ (3.10) | $ 4.17 | |||||||||
Diluted [Abstract] | ||||||||||||||||||||||||
Weighted average shares outstanding (in shares) | 14,423,000 | 14,639,000 | 14,439,000 | |||||||||||||||||||||
Assumed conversion of convertible preferred stock (in shares) | 0 | 0 | 840,000 | |||||||||||||||||||||
Total dilutive shares (in shares) | 14,423,000 | 14,639,000 | 15,279,000 | |||||||||||||||||||||
Net income (loss) attributable to common shareholders | $ (38,626) | $ (45,328) | $ 60,147 | |||||||||||||||||||||
Convertible preferred stock dividend | 0 | 0 | 90 | |||||||||||||||||||||
Net income (loss) attributable to DXP Enterprises, Inc. for diluted earnings per share | $ (38,626) | $ (45,328) | $ 60,237 | |||||||||||||||||||||
Per share amount (in dollars per share) | $ (0.20) | $ (3.64) | $ 0.47 | $ 0.63 | $ (6.09) | $ 1.10 | $ 0.96 | $ 0.70 | $ 1.10 | $ 1.07 | $ 0.90 | $ 0.87 | $ (2.68) | $ (3.10) | $ 3.94 | |||||||||
Preferred Stock [Member] | ||||||||||||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||||||||||||
Antidilutive securities excluded from earnings per share calculation (in shares) | 840,000 | |||||||||||||||||||||||
[1] | During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 01, 2015 | Apr. 01, 2015 | May. 01, 2014 | Jan. 02, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | [1] | Jun. 30, 2015 | [1] | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | [1] | Jun. 30, 2014 | [1] | Mar. 31, 2014 | [1] | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Business Acquisition [Line Items] | |||||||||||||||||||||||
Maximum period of information after acquisition date for revision in estimates | 1 year | ||||||||||||||||||||||
Goodwill on acquisition | $ 197,362 | $ 253,312 | $ 197,362 | $ 197,362 | $ 253,312 | $ 188,110 | |||||||||||||||||
Impairment charges | 9,800 | $ 58,900 | $ 0 | $ 0 | [1] | 117,600 | $ 0 | $ 0 | $ 0 | 67,663 | 117,569 | ||||||||||||
Deferred tax liability | 600 | 16,000 | 600 | 600 | 16,000 | ||||||||||||||||||
Acquisition related costs | 7,348 | 0 | 0 | ||||||||||||||||||||
Business Acquired during 2014 and 2015 [Member] | |||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||
Sales from business acquisitions | 9,100 | 171,100 | |||||||||||||||||||||
Earnings (loss) before taxes and impairment from business acquisitions | 200 | (91,500) | |||||||||||||||||||||
Impairment charges | 67,700 | ||||||||||||||||||||||
Tool Supply, Inc. [Member] | |||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||
Purchase price | $ 5,000 | ||||||||||||||||||||||
Goodwill on acquisition | 2,900 | ||||||||||||||||||||||
Intangible assets on acquisition | $ 2,000 | ||||||||||||||||||||||
Purchase price allocation [Abstract] | |||||||||||||||||||||||
Cash | 0 | 0 | 0 | ||||||||||||||||||||
Accounts Receivable, net | 442 | 442 | 442 | ||||||||||||||||||||
Inventory | 475 | 475 | 475 | ||||||||||||||||||||
Property and equipment | 42 | 42 | 42 | ||||||||||||||||||||
Goodwill and intangibles | [2] | 4,929 | 4,929 | 4,929 | |||||||||||||||||||
Other assets | 100 | 100 | 100 | ||||||||||||||||||||
Assets acquired | 5,988 | 5,988 | 5,988 | ||||||||||||||||||||
Current liabilities assumed | (335) | (335) | (335) | ||||||||||||||||||||
Non-current liabilities assumed | [3] | (653) | (653) | (653) | |||||||||||||||||||
Net assets acquired | 5,000 | 5,000 | 5,000 | ||||||||||||||||||||
Cortech Engineering, LLC [Member] | |||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||
Purchase price | $ 14,900 | ||||||||||||||||||||||
Purchase price financed under common stock issued | $ 4,400 | ||||||||||||||||||||||
Number of shares issued on acquisition (in shares) | 148,800,000 | ||||||||||||||||||||||
Goodwill on acquisition | $ 8,800 | ||||||||||||||||||||||
Intangible assets on acquisition | $ 5,200 | ||||||||||||||||||||||
Nontax deductible goodwill or intangible assets | $ 4,500 | ||||||||||||||||||||||
Purchase price allocation [Abstract] | |||||||||||||||||||||||
Cash | 0 | 0 | 0 | ||||||||||||||||||||
Accounts Receivable, net | 2,293 | 2,293 | 2,293 | ||||||||||||||||||||
Inventory | 1,243 | 1,243 | 1,243 | ||||||||||||||||||||
Property and equipment | 253 | 253 | 253 | ||||||||||||||||||||
Goodwill and intangibles | [2] | 14,048 | 14,048 | 14,048 | |||||||||||||||||||
Other assets | 21 | 21 | 21 | ||||||||||||||||||||
Assets acquired | 17,858 | 17,858 | 17,858 | ||||||||||||||||||||
Current liabilities assumed | (2,610) | (2,610) | (2,610) | ||||||||||||||||||||
Non-current liabilities assumed | [3] | (349) | (349) | (349) | |||||||||||||||||||
Net assets acquired | 14,899 | 14,899 | $ 14,899 | ||||||||||||||||||||
B27, LLC [Member] | |||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||
Purchase price | 304,900 | ||||||||||||||||||||||
Transaction cost | 1,000 | ||||||||||||||||||||||
Purchase price financed under common stock issued | $ 4,000 | ||||||||||||||||||||||
Number of shares issued on acquisition (in shares) | 36,000 | ||||||||||||||||||||||
Goodwill on acquisition | $ 178,300 | ||||||||||||||||||||||
Intangible assets on acquisition | 81,100 | ||||||||||||||||||||||
Nontax deductible goodwill or intangible assets | $ 154,600 | ||||||||||||||||||||||
Discount rate for valuation of acquired intangibles | 13.50% | ||||||||||||||||||||||
Impairment charges | 105,300 | 67,700 | |||||||||||||||||||||
Expected payment to resolve working capital dispute | 11,300 | ||||||||||||||||||||||
Acquisition related costs | 7,300 | ||||||||||||||||||||||
Required payment tax refund | 4,000 | $ 4,000 | $ 4,000 | ||||||||||||||||||||
Federal portion of refund received | $ 3,600 | ||||||||||||||||||||||
Purchase price allocation [Abstract] | |||||||||||||||||||||||
Cash | 2,538 | 2,538 | |||||||||||||||||||||
Accounts Receivable, net | 51,448 | 51,448 | |||||||||||||||||||||
Inventory | 6,472 | 6,472 | |||||||||||||||||||||
Property and equipment | 14,573 | 14,573 | |||||||||||||||||||||
Goodwill and intangibles | [2] | 259,412 | 259,412 | ||||||||||||||||||||
Other assets | 1,791 | 1,791 | |||||||||||||||||||||
Assets acquired | 336,234 | 336,234 | |||||||||||||||||||||
Current liabilities assumed | (26,690) | (26,690) | |||||||||||||||||||||
Non-current liabilities assumed | [3] | (15,992) | (15,992) | ||||||||||||||||||||
Net assets acquired | 293,552 | 293,552 | |||||||||||||||||||||
Machinery Tooling and Supply LLC [Member] | |||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||
Purchase price | $ 14,600 | ||||||||||||||||||||||
Goodwill on acquisition | 4,300 | ||||||||||||||||||||||
Intangible assets on acquisition | $ 4,100 | ||||||||||||||||||||||
Purchase price allocation [Abstract] | |||||||||||||||||||||||
Cash | 806 | 806 | |||||||||||||||||||||
Accounts Receivable, net | 5,656 | 5,656 | |||||||||||||||||||||
Inventory | 2,522 | 2,522 | |||||||||||||||||||||
Property and equipment | 557 | 557 | |||||||||||||||||||||
Goodwill and intangibles | [2] | 8,405 | 8,405 | ||||||||||||||||||||
Other assets | 59 | 59 | |||||||||||||||||||||
Assets acquired | 18,005 | 18,005 | |||||||||||||||||||||
Current liabilities assumed | (3,336) | (3,336) | |||||||||||||||||||||
Non-current liabilities assumed | [3] | 0 | 0 | ||||||||||||||||||||
Net assets acquired | $ 14,669 | 14,669 | |||||||||||||||||||||
Units Acquired in 2013 and 2014 [Member] | |||||||||||||||||||||||
Pro Forma Information [Abstract] | |||||||||||||||||||||||
Net sales | 1,263,000 | 1,541,000 | |||||||||||||||||||||
Net income (loss) | $ (37,000) | $ (44,000) | |||||||||||||||||||||
Per share data [Abstract] | |||||||||||||||||||||||
Basic earnings (loss) (in dollars per share) | $ (2.60) | $ (2.99) | |||||||||||||||||||||
Diluted earnings (loss) (in dollars per share) | $ (2.60) | $ (2.99) | |||||||||||||||||||||
Units Acquired in 2012 and 2013 [Member] | |||||||||||||||||||||||
Pro Forma Information [Abstract] | |||||||||||||||||||||||
Net sales | $ 1,513,000 | 1,496,000 | |||||||||||||||||||||
Net income (loss) | $ (45,000) | $ 71,000 | |||||||||||||||||||||
Per share data [Abstract] | |||||||||||||||||||||||
Basic earnings (loss) (in dollars per share) | $ (3.08) | $ 4.90 | |||||||||||||||||||||
Diluted earnings (loss) (in dollars per share) | $ (3.08) | $ 4.64 | |||||||||||||||||||||
[1] | During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. | ||||||||||||||||||||||
[2] | The amounts in the table above have not been reduced by the $105.3 million, or the $67.7 million, of goodwill impairment charges for B27 recorded in the fourth quarter of 2014 and the second half of 2015, respectively. | ||||||||||||||||||||||
[3] | Includes deferred tax liability of $0.6 million and $16.0 million related to intangible assets acquired for 2015 and 2014, respectively. |
COMMITMENTS AND CONTINGENCIES57
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Future minimum rental commitments for non-cancelable leases [Abstract] | |||
2,016 | $ 23,951 | ||
2,017 | 19,215 | ||
2,018 | 12,676 | ||
2,019 | 7,497 | ||
2,020 | 4,058 | ||
Thereafter | 9,861 | ||
Rental expense for operating leases | $ 32,700 | $ 32,300 | $ 27,600 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |||
Rate of company matching | 50.00% | 50.00% | 50.00% |
Percentage of deferred salary which is matched | 4.00% | 4.00% | 4.00% |
Company contribution to the 401(K) plan | $ 2.6 | $ 2.5 | $ 2.7 |
OTHER COMPREHENSIVE INCOME (Det
OTHER COMPREHENSIVE INCOME (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Company | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
OTHER COMPREHENSIVE INCOME [Abstract] | |||
Other comprehensive (loss) income related to investment valuation | $ 0 | $ (100) | $ (600) |
Number of companies acquired | Company | 4 | ||
Cumulative translation adjustment | $ (4,916) | (3,277) | (3,040) |
Income tax benefits on cumulative translation adjustments | $ 2,600 | $ 1,700 | $ 1,600 |
SEGMENT AND GEOGRAPHICAL REPO60
SEGMENT AND GEOGRAPHICAL REPORTING, Business Segmented Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||
Sales | $ 1,247,043 | $ 1,499,662 | $ 1,241,510 |
Operating income for reportable segments, excluding impairment expense | 113,967 | 172,655 | |
Operating income for reportable segments | 153,398 | ||
Identifiable assets at year end | 660,710 | 825,047 | 615,034 |
Capital expenditures | 12,172 | 8,265 | 6,884 |
Depreciation | 10,891 | 11,194 | 8,582 |
Amortization | 20,621 | 22,480 | 11,830 |
Interest expense | 10,932 | 12,797 | 6,282 |
Impairment expense by segment | 68,735 | 117,569 | 0 |
Reportable Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income for reportable segments | 113,967 | 172,655 | 153,398 |
Reportable Segment [Member] | Service Centers [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 826,588 | 987,561 | 884,821 |
Operating income for reportable segments, excluding impairment expense | 78,170 | 107,699 | |
Operating income for reportable segments | 107,142 | ||
Identifiable assets at year end | 451,333 | 568,182 | 500,978 |
Capital expenditures | 3,185 | 4,100 | 6,321 |
Depreciation | 7,734 | 8,416 | 7,770 |
Amortization | 10,334 | 11,281 | 8,574 |
Interest expense | 2,967 | 3,422 | |
Impairment expense by segment | 15,842 | 10,210 | |
Reportable Segment [Member] | Innovative Pumping Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 254,829 | 348,134 | 209,175 |
Operating income for reportable segments, excluding impairment expense | 21,584 | 51,162 | |
Operating income for reportable segments | 33,766 | ||
Identifiable assets at year end | 159,365 | 202,228 | 66,007 |
Capital expenditures | 8,383 | 4,043 | 357 |
Depreciation | 2,930 | 2,381 | 446 |
Amortization | 8,406 | 8,993 | 1,043 |
Interest expense | 6,881 | 8,451 | |
Impairment expense by segment | 52,893 | 107,359 | |
Reportable Segment [Member] | Supply Chain Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 165,626 | 163,967 | 147,514 |
Operating income for reportable segments, excluding impairment expense | 14,213 | 13,794 | |
Operating income for reportable segments | 12,490 | ||
Identifiable assets at year end | 50,012 | 54,637 | 48,049 |
Capital expenditures | 604 | 122 | 206 |
Depreciation | 227 | 397 | 366 |
Amortization | 1,881 | 2,206 | $ 2,213 |
Interest expense | 1,084 | 924 | |
Impairment expense by segment | $ 0 | $ 0 |
SEGMENT AND GEOGRAPHICAL REPO61
SEGMENT AND GEOGRAPHICAL REPORTING, Adjustments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||
Operating income for reportable segments, excluding impairment expense | $ 153,398 | ||
Adjustment for [Abstract] | |||
B27 settlement | $ 7,348 | $ 0 | 0 |
Impairment expense | 68,735 | 117,569 | 0 |
Amortization of intangibles | 20,621 | 22,480 | 11,830 |
Total operating income (loss) | (27,916) | (12,628) | 100,924 |
Interest expense | 10,932 | 12,797 | 6,282 |
Other expense (income), net | 72 | 131 | (75) |
Income (loss) before income taxes | (38,920) | (25,556) | 94,717 |
Capital expenditures | 13,992 | ||
Identifiable assets at year end | 683,980 | 841,632 | |
Depreciation | 12,622 | 12,598 | 9,830 |
Corporate [Member] | |||
Adjustment for [Abstract] | |||
Capital expenditures | 1,800 | 800 | 900 |
Identifiable assets at year end | 23,300 | 19,300 | 20,300 |
Depreciation | 1,700 | 1,400 | 1,200 |
Reportable Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income for reportable segments, excluding impairment expense | 113,967 | 172,655 | 153,398 |
Segment Reconciling Items [Member] | |||
Adjustment for [Abstract] | |||
B27 settlement | 7,348 | 0 | 0 |
Impairment expense | 68,735 | 117,569 | 0 |
Amortization of intangibles | 20,621 | 22,480 | 11,830 |
Corporate and other expense, net | $ 45,179 | $ 45,234 | $ 40,644 |
SEGMENT AND GEOGRAPHICAL REPO62
SEGMENT AND GEOGRAPHICAL REPORTING, Geographical Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 1,247,043 | $ 1,499,662 | $ 1,241,510 |
Property and equipment, net | 68,503 | 69,979 | |
Reportable Geographical Components [Member] | United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,119,210 | 1,300,493 | 1,075,962 |
Property and equipment, net | 53,695 | 49,013 | |
Reportable Geographical Components [Member] | Canada [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 127,833 | 195,633 | 165,548 |
Property and equipment, net | 14,724 | 20,966 | |
Reportable Geographical Components [Member] | Dubai [Member] | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 84 | 0 | |
Reportable Geographical Components [Member] | Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 0 | $ 3,536 | $ 0 |
QUARTERLY FINANCIAL INFORMATI63
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | [1] | Jun. 30, 2015 | [1] | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | [1] | Jun. 30, 2013 | [1] | Mar. 31, 2013 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Quarterly Financial Information [Line Items] | ||||||||||||||||||||||||
Sales | $ 278,600 | $ 303,100 | $ 323,700 | $ 341,600 | $ 382,600 | $ 387,000 | [1] | $ 381,600 | [1] | $ 348,500 | [1] | $ 313,800 | $ 329,700 | $ 307,900 | $ 290,100 | $ 1,247,043 | $ 1,499,662 | $ 1,241,510 | ||||||
Gross profit | 76,900 | 85,700 | 91,300 | 98,100 | 106,700 | 113,400 | [1] | 111,000 | [1] | 101,700 | [1] | 94,600 | 97,100 | 91,500 | 89,100 | 351,986 | 432,840 | 372,345 | ||||||
Impairment expense | 9,800 | 58,900 | 0 | 0 | 117,600 | 0 | [1] | 0 | [1] | 0 | [1] | 67,663 | 117,569 | |||||||||||
Net income (loss) | (3,200) | (52,700) | 7,200 | 9,700 | $ (88,100) | $ 17,000 | [1] | $ 14,900 | [1] | $ 10,900 | [1] | $ 16,900 | $ 16,400 | $ 13,700 | $ 13,200 | (39,070) | (45,238) | 60,237 | ||||||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (3,000) | $ (52,400) | $ 7,200 | $ 9,700 | $ (38,536) | $ (45,238) | $ 60,237 | |||||||||||||||||
Earnings (loss) per share - basic (in dollars per share) | $ (0.20) | $ (3.64) | $ 0.50 | $ 0.67 | $ (6.09) | $ 1.16 | [1] | $ 1.01 | [1] | $ 0.74 | [1] | $ 1.17 | $ 1.13 | $ 0.95 | $ 0.92 | $ (2.68) | $ (3.10) | $ 4.17 | ||||||
Earnings (loss) per share - diluted (in dollars per share) | $ (0.20) | $ (3.64) | $ 0.47 | $ 0.63 | $ (6.09) | $ 1.10 | [1] | $ 0.96 | [1] | $ 0.70 | [1] | $ 1.10 | $ 1.07 | $ 0.90 | $ 0.87 | $ (2.68) | $ (3.10) | $ 3.94 | ||||||
Increase in amortization expense | $ 1,000 | |||||||||||||||||||||||
Previously Reported [Member] | ||||||||||||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||||||||||
Sales | $ 387,000 | $ 381,600 | $ 348,500 | |||||||||||||||||||||
Gross profit | 113,400 | 111,000 | 101,700 | |||||||||||||||||||||
Net income (loss) | $ 17,600 | $ 15,500 | $ 11,600 | |||||||||||||||||||||
Earnings (loss) per share - basic (in dollars per share) | $ 1.20 | $ 1.06 | $ 0.79 | |||||||||||||||||||||
Earnings (loss) per share - diluted (in dollars per share) | $ 1.14 | $ 1 | $ 0.75 | |||||||||||||||||||||
Adjusted [Member] | ||||||||||||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||||||||||
Sales | $ 387,000 | $ 381,600 | $ 348,500 | |||||||||||||||||||||
Gross profit | 113,400 | 111,000 | 101,700 | |||||||||||||||||||||
Net income (loss) | $ 17,000 | $ 14,900 | $ 10,900 | |||||||||||||||||||||
Earnings (loss) per share - basic (in dollars per share) | $ 1.16 | $ 1.01 | $ 0.74 | |||||||||||||||||||||
Earnings (loss) per share - diluted (in dollars per share) | $ 1.10 | $ 0.96 | $ 0.70 | |||||||||||||||||||||
[1] | During the fourth quarter of 2014, DXP finalized its purchase accounting for customer relationships for the acquisition of B27 and amortized the customer relationships on an accelerated basis. The revision increased amortization expense by $1.0 million per quarter. |
RELATED PARTIES (Details)
RELATED PARTIES (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)Employee | |
Related Party Transaction [Line Items] | |
Wages and other compensation | $ 500,000 |
Minimum [Member] | |
Related Party Transaction [Line Items] | |
Transaction amount | 120,000 |
Chairman of the Board, President and Chief Executive Officer [Member] | |
Related Party Transaction [Line Items] | |
Lease expenses | $ 1,700,000 |
Number of related party employees | Employee | 6 |
Payroll, related payroll expenses, vehicles, fuel and supplies | $ 400,000 |
Senior Vice President [Member] | |
Related Party Transaction [Line Items] | |
Lease expenses | 1,100,000 |
Children of Chairman of the Board, President and Chief Executive Officer [Member] | |
Related Party Transaction [Line Items] | |
Lease expenses | $ 200,000 |
Sons of Executives [Member] | |
Related Party Transaction [Line Items] | |
Number of related party employees | Employee | 2 |
Sons-in-laws of Executives [Member] | |
Related Party Transaction [Line Items] | |
Number of related party employees | Employee | 2 |
Sons and Sons in Law of Executives [Member] | |
Related Party Transaction [Line Items] | |
Number of related party employees | Employee | 4 |