Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 13, 2016 | |
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 Common Stock, Shares Outstanding | 14,429,780 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 622 | $ 1,693 |
Trade accounts receivable, net of allowance for doubtful accounts of $9,565 in 2016 and $9,364 in 2015 | 160,671 | 162,925 |
Inventories, net | 105,872 | 103,819 |
Costs and estimated profits in excess of billings on uncompleted contracts | 18,389 | 22,045 |
Prepaid expenses and other current assets | 8,405 | 2,644 |
Federal income taxes recoverable | 3,133 | 1,839 |
Deferred income taxes | 9,400 | 8,996 |
Total current assets | 306,492 | 303,961 |
Property and equipment, net | 68,185 | 68,503 |
Goodwill | 197,211 | 197,362 |
Other intangible assets, net of accumulated amortization of $89,330 in 2016 and $85,098 in 2015 | 108,957 | 112,297 |
Other long-term assets | 1,822 | 1,857 |
Total assets | 682,667 | 683,980 |
Current liabilities: | ||
Current maturities of long-term debt | 364,842 | 50,829 |
Less unamortized debt issuance costs | (1,321) | 0 |
Short-term debt less unamortized debt issuance costs | 363,521 | 50,829 |
Trade accounts payable | 73,914 | 77,108 |
Accrued wages and benefits | 16,525 | 20,864 |
Customer advances | 3,187 | 1,076 |
Billings in excess of costs and profits on uncompleted contracts | 4,131 | 8,021 |
Other current liabilities | 16,071 | 22,220 |
Total current liabilities | 477,349 | 180,118 |
Long-term debt, less current maturities | 0 | 300,726 |
Less unamortized debt issuance costs | 0 | (2,046) |
Long-term debt less unamortized debt issuance costs | 0 | 298,680 |
Non-current deferred income taxes | $ 11,315 | $ 6,312 |
Commitments and Contingencies (Note 15) | ||
Shareholders' equity: | ||
Common stock, $0.01 par value, 100,000,000 shares authorized; 14,694,077 at March 31, 2016 and 14,655,356 at December 31, 2015 shares issued and outstanding | $ 146 | $ 146 |
Additional paid-in capital | 110,155 | 110,306 |
Retained earnings | 104,648 | 109,783 |
Accumulated other comprehensive loss | (9,978) | (10,616) |
Treasury stock, at cost (264,297 shares in 2016 and 264,297 in 2015) | (12,577) | (12,577) |
Total DXP Enterprises, Inc. shareholders' equity | 192,410 | 197,058 |
Noncontrolling interest | 1,593 | 1,812 |
Total shareholders' equity | 194,003 | 198,870 |
Total liabilities and shareholders' equity | 682,667 | 683,980 |
Series A Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | 1 | 1 |
Series B Convertible Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | $ 15 | $ 15 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Current assets: | ||
Trade accounts receivable, allowance for doubtful accounts | $ 9,565 | $ 9,364 |
Other intangible assets accumulated amortization | $ 89,330 | $ 85,098 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 14,694,077 | 14,655,356 |
Common stock shares outstanding (in shares) | 14,694,077 | 14,655,356 |
Treasury stock (in shares) | 264,297 | 264,297 |
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 | $ 100 |
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 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited) [Abstract] | ||
Sales | $ 253,561 | $ 341,594 |
Cost of sales | 184,743 | 243,545 |
Gross profit | 68,818 | 98,049 |
Selling, general and administrative expense | 70,820 | 79,950 |
Operating income (loss) | (2,002) | 18,099 |
Other expense (income), net | (155) | (249) |
Interest expense | 3,409 | 2,683 |
Income (loss) before income taxes | (5,256) | 15,665 |
Provision (benefit) for income taxes | (8) | 6,014 |
Net income (loss) | (5,248) | 9,651 |
Less net income (loss) attributable to noncontrolling interest | (136) | 0 |
Net income (loss) attributable to DXP Enterprises, Inc. | (5,112) | 9,651 |
Preferred stock dividend | 23 | 23 |
Net income (loss) attributable to common shareholders | (5,135) | 9,628 |
Net income (loss) | (5,248) | 9,651 |
Cumulative translation adjustment | (638) | 3,040 |
Comprehensive income (loss) | $ (4,610) | $ 6,611 |
Basic earnings (loss) per share attributable to DXP Enterprises, Inc. (in dollars per share) | $ (0.35) | $ 0.67 |
Weighted average common shares outstanding (in shares) | 14,486 | 14,391 |
Diluted earnings (loss) per share attributable to DXP Enterprises, Inc. (in dollars per share) | $ (0.35) | $ 0.63 |
Weighted average common shares and common equivalent shares outstanding (in shares) | 14,486 | 15,231 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (5,112) | $ 9,651 |
Less net income (loss) attributable to non-controlling interest | (136) | 0 |
Net income (loss) | (5,248) | 9,651 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 3,018 | 2,901 |
Amortization of intangible assets | 4,528 | 5,358 |
Bad debt expense | 405 | 516 |
Amortization of debt issuance costs | 330 | 289 |
Write off of debt issuance costs | 395 | 0 |
Compensation expense for restricted stock | 766 | 812 |
Tax loss related to vesting of restricted stock | 561 | 46 |
Deferred income taxes | 3,532 | 1,262 |
Changes in operating assets and liabilities, net of assets and liabilities acquired in business acquisitions: | ||
Trade accounts receivable | 3,549 | 23,588 |
Costs and estimated profits in excess of billings on uncompleted contracts | 3,532 | (3,340) |
Inventories | (1,801) | 3,018 |
Prepaid expenses and other assets | (1,646) | (2,181) |
Accounts payable and accrued expenses | (15,715) | (18,389) |
Billings in excess of costs and estimated profits on uncompleted contracts | (3,905) | (1,550) |
Net cash provided (used) by operating activities | (7,699) | 21,981 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (1,690) | (3,574) |
Equity method investment contribution | (4,000) | 0 |
Net cash used in investing activities | (5,690) | (3,574) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from debt | 109,288 | 123,351 |
Principal payments on revolving line of credit and other long-term debt | (96,001) | (130,016) |
Costs for registration of common shares | (216) | 0 |
Loss for non-controlling interest owners, net of tax | (83) | 0 |
Dividends paid | (23) | (23) |
Purchase of treasury stock | 0 | (8,908) |
Tax loss related to vesting of restricted stock | (561) | (46) |
Net cash provided by (used in) financing activities | 12,404 | (15,642) |
EFFECT OF FOREIGN CURRENCY ON CASH | (86) | (403) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (1,071) | 2,362 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,693 | 47 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 622 | $ 2,409 |
THE COMPANY
THE COMPANY | 3 Months Ended |
Mar. 31, 2016 | |
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 services 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 14 for discussion of the business segments. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
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”). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2015. In the opinion of management, these condensed consolidated financial statements contain all adjustments necessary to present fairly the Company’s condensed consolidated balance sheets as of December 31, 2015 and March 31, 2016 (unaudited), condensed consolidated statements of income and comprehensive income for the three ending March 31, 2015 and March 31, 2016 (unaudited), and condensed consolidated statements of cash flows for the three months ended March 31, 2015 and March 31, 2016 (unaudited). All such adjustments represent normal recurring items. 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 March 31, 2016, the total assets of the VIE were approximately $4.6 million including approximately $4.3 million of fixed assets. DXP is the sole customer of the VIE. Consolidation of the VIE increased cost of sales by approximately $0.4 million for the three months ended March 31, 2016. The Company recognized a related income tax benefit of $0.1 million related to the VIE for the three months ended March 31, 2016. At March 31, 2016, the owners of the 52.5% of the equity not owned by DXP included a former executive officer and other employees of DXP. The Company was not the primary beneficiary of the VIE for the three months ended March 31, 2015. Equity investments in which we exercise significant influence, but do not control and are not the primary beneficiary, are accounted for using the equity method of accounting. During the first quarter of 2016, DXP invested $4.0 million in a related party equity method investment which is included in “Prepaid expenses and other current assets” due to its short-term nature. A portion of the remaining interest in this investment is owned by the Company’s Chief Executive Officer. All intercompany accounts and transactions have been eliminated upon consolidation. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 3 Months Ended |
Mar. 31, 2016 | |
RISKS AND UNCERTAINTIES [Abstract] | |
RISKS AND UNCERTAINTIES | NOTE 3 – RISKS AND UNCERTAINTIES We believe our cash generated from operations will meet our normal working capital needs during the next twelve months. However, we expect we will not be able to comply with the financial covenants under our credit facility in the upcoming quarter and will need to amend our credit facility or obtain alternative financing including additional debt and/or equity. Such alternative financings may include additional bank debt or the public or private sale of debt or equity securities. In connection with any such financing, we may issue securities that substantially dilute the interests of our shareholders. We may not be able to amend the Facility or to obtain alternative financing on attractive terms, if at all |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2016 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): classification as a finance or operating lease. The criteria for determining whether a lease is a finance or operating lease has not been significantly changed by this ASU. The ASU also requires additional disclosure of the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. This pronouncement is effective for financial statements issued for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. 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. 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 August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | 3 Months Ended |
Mar. 31, 2016 | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | NOTE 5 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Authoritative guidance for financial assets and liabilities measured on a recurring basis applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. Fair value, as defined in the authoritative guidance, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance affects the fair value measurement of an investment with quoted market prices in an active market for identical instruments, which must be classified in one of the following categories: Level 1 Inputs Level 1 inputs come from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs Level 2 inputs are other than quoted prices that are observable for an asset or liability. These inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs Level 3 inputs are unobservable inputs for the asset or liability which require the Company’s own assumptions. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. During the third and fourth quarters of 2015, in connection with interim tests for impairment, DXP recorded total impairment charges of $68.7 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 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. |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Mar. 31, 2016 | |
INVENTORIES, NET [Abstract] | |
INVENTORIES, NET | NOTE 6 – INVENTORIES, NET The carrying values of inventories are as follows ( in thousands March 31, 2016 December 31, 2015 Finished goods $ 95,079 $ 94,524 Work in process 10,793 9,295 Inventories, net $ 105,872 $ 103,819 |
COSTS AND ESTIMATED PROFITS ON
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS | 3 Months Ended |
Mar. 31, 2016 | |
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS [Abstract] | |
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS | NOTE 7 – COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS Costs and estimated profits 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 profits on uncompleted contracts and related amounts billed were as follows (in thousands): March 31, 2016 December 31, 2015 Costs incurred on uncompleted contracts $ 36,331 $ 34,400 Estimated profits, thereon 14,493 13,119 Total 50,824 47,519 Less: billings to date 36,573 33,422 Net $ 14,251 $ 14,097 Such amounts were included in the accompanying condensed consolidated balance sheets for 2016 and 2015 under the following captions (in thousands): March 31, 2016 December 31, 2015 Costs and estimated profits in excess of billings on uncompleted contracts $ 18,389 $ 22,045 Billings in excess of costs and profits on uncompleted contracts (4,131 ) (8,021 ) Translation adjustment (7 ) 73 Net $ 14,251 $ 14,097 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2016 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 8 - PROPERTY AND EQUIPMENT, NET The carrying values of property and equipment are as follows ( in thousands March 31, 2016 December 31, 2015 Land $ 2,386 $ 2,386 Buildings and leasehold improvements 16,687 16,631 Furniture, fixtures and equipment 104,944 102,494 Less – Accumulated depreciation (55,832 ) (53,008 ) Total property and equipment, net $ 68,185 $ 68,503 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 9 - GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents the changes in the carrying amount of goodwill and other intangible assets during the three months ended March 31, 2016 ( in thousands Goodwill Other Intangible Assets Total Balance as of December 31, 2015 $ 197,362 $ 112,297 $ 309,659 Purchase price adjustment (151 ) - (151 ) Translation adjustment - 1,188 1,188 Amortization - (4,528 ) (4,528 ) Balance as of March 31, 2016 $ 197,211 $ 108,957 $ 306,168 The following table presents goodwill balance by reportable segment as of March 31, 2016 and December 31, 2015 (in thousands) March 31, 2016 December 31, 2015 Service Centers $ 164,093 $ 164,244 Innovative Pumping Solutions 15,980 15,980 Supply Chain Services 17,138 17,138 Total $ 197,211 $ 197,362 The following table presents a summary of amortizable other intangible assets ( in thousands As of March 31, 2016 As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Carrying Amount, net Gross Carrying Amount Accumulated Amortization Carrying Amount, net Customer relationships 196,482 (87,915 ) 108,567 195,580 (83,741 ) 111,839 Non-compete agreements 1,805 (1,415 ) 390 1,815 (1,357 ) 458 Total $ 198,287 $ (89,330 ) $ 108,957 $ 197,395 $ (85,098 ) $ 112,297 Other intangible assets are amortized according to estimated economic benefits over their estimated useful lives. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2016 | |
LONG-TERM DEBT [Abstract] | |
LONG-TERM DEBT | NOTE 10 – LONG-TERM DEBT Long-term debt consisted of the following at March 31, 2016 and December 31, 2015 ( in thousands March 31, 2016 December 31, 2015 Line of credit $ 198,139 $ 172,147 Term loan 162,500 175,000 Promissory note payable in monthly installments at 2.9% through January 2021, collateralized by equipment 4,203 4,408 Less unamortized debt issuance costs (1,321 ) (2,046 ) 363,521 349,509 Less: Current portion 363,521 (50,829 ) Long-term debt less current maturities $ - $ 298,680 All of our debt under the DXP’s credit facility has been characterized as current because we failed to comply with two of our financial covenants under the credit facility on March 31, 2016, prior to the amendment on May 12, 2016. While the amendment on May 12, 2016 provided us with a holiday from, and an amendment to, certain financial covenants, we expect that we will not be able to comply with the financial covenants in our credit facility in the upcoming quarter and will need to amend our credit facility or obtain alternative financing. If such an amendment or alternate financing is not obtained, then we believe that the liquidity of our balance sheet and credit facility at March 31, 2016 may not provide us with the ability to meet our working capital needs, scheduled principal payments, capital expenditures and Series B convertible preferred stock dividend payments during 2016. 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 amended by that certain First Amendment to Amended and Restated Credit Agreement, dated as of August 6, 2015 (the “First Amendment”), that certain Second Amendment to Amended and Restated Credit Agreement, dated as of September 30, 2015 (the “Second Amendment”) and that certain Third Amendment to Amended and Restated Credit Agreement, dated as of May 12, 2016 (the “Third Amendment”), the “Facility”), amending and restating the Original Facility.Pursuant to the Facility, the lenders named therein provided to DXP a $250 million term loan and a $350 million revolving line of credit. The Facility expires on January 2, 2019. Loans made from the Facility may be used for working capital and general corporate purposes of DXP and its subsidiaries. Amortization payments are required with respect to the Facility on the last business day of each fiscal quarter, payable at $12.5 million per quarter for the fiscal quarter periods ending March 31, 2016 through and including December 31, 2016, and payable at $15.625 million per quarter for the fiscal quarter periods ending March 31, 2017 and thereafter. At March 31, 2016, the aggregate principal amount of term loans outstanding under the Facility was $162.5 million. Under the terms of the First Amendment. the pricing grid was modified to add a new interest rate level in the event that DXP’s consolidated leverage ratio as defined by the Facility as of the last day of the fiscal quarter most recently ended is greater than or equal to 4.00 to 1.00 and certain modifications were made to the financial covenant ratios applicable after June 30, 2015. Under the terms of the Second Amendment, an adjustment was made to the calculation of consolidated EBITDA as defined by the Facility. Under the terms of the Third Amendment: · The revolving line of credit commitment was reduced by $100 million, from $350 million to $250 million; · Certain modifications were made to the pricing grid set forth in the Facility to change the rate at which the Facility bears interest to a rate equal to LIBOR (or CDOR for Canadian dollar loans) plus 1.75% to 3.25% and Base Rate (or Canadian Base Rate for Canadian dollar loans) plus 0.75% to 2.25%; · Certain technical amendments were made with respect to the impact of European Union bail-in legislation on liabilities of certain non-U.S. financial institutions; · A weekly cash sweep mechanism was added in respect of the consolidated cash balances of DXP in excess of $3,000,000 calculated based upon a thirty-day average balance; · A financial covenant holiday has been provided from January 1, 2016 through, and including, March 31, 2016 for the Consolidated Leverage Ratio and the Consolidated Fixed Charge Ratio; and · The minimum Asset Coverage Ratio was reduced to 0.90 to 1.00 beginning on March 31, 2016, and all times thereafter until July 31, 2016. The Facility provides the option of interest at LIBOR (or CDOR for Canadian dollar loans) plus an applicable margin ranging from 1.75% to 3.25% or prime plus an applicable margin from 0.75% to 2.25% 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. 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 March 31, 2016, the LIBOR based rate in effect under the Facility was LIBOR plus 2.25% the prime based rate of the Facility was prime plus 1.25%, and the commitment fee was 0.50%. The Third Amendment increased the LIBOR based rate under the Facility to LIBOR plus 3.25% and the prime based rate of the Facility to prime plus 2.25% as of the date of the amendment. At March 31, 2016, $360.6 million was borrowed under the Facility at a weighted average interest rate of approximately 2.69% under the LIBOR options. At March 31, 2016, the Company had $22.3 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. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2016 | |
STOCK-BASED COMPENSATION [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11 - STOCK-BASED COMPENSATION Restricted Stock Under the restricted stock plan approved by our shareholders (the “Restricted Stock Plan”), directors, consultants and employees were awarded shares of DXP’s common stock. The shares of restricted stock granted to employees and that are outstanding as of March 31, 2016 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 the grant date; or 10% each year for ten years after the grant date. The Restricted Stock Plan provided that on each July 1 during the term of the plan each non-employee director of DXP would be granted the number of whole shares calculated by dividing $75 thousand 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 was 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 Restricted Stock Plan expired in July of 2015. The following table provides certain information regarding the shares authorized and outstanding under the Restricted Stock Plan at March 31, 2016: Number of shares authorized for grants 800,000 Number of shares granted (873,199 ) Number of shares forfeited 165,997 Number of shares available for future grants - (1) Weighted-average grant price of granted shares $ 28.40 (1) The Restricted Stock Plan expired in July of 2015. Changes in restricted stock for the three months ended March 31, 2016 were as follows: Number of Shares Weighted Average Grant Price Non-vested at December 31, 2015 137,507 $ 54.58 Granted - $ - Forfeited (22,121 ) $ 83.75 Vested (38,721 ) $ 50.11 Non-vested at March 31, 2016 76,665 $ 48.41 Compensation expense, associated with restricted stock, recognized in the three months ended March 31, 2016 and 2015 was $0.8 million and $0.8 million, respectively. Related income tax losses recognized in earnings for the three months ended March 31, 2016 were approximately $0.5 million. Unrecognized compensation expense under the Restricted Stock Plan at March 31, 2016 and December 31, 2015 was $3.3 million and $4.0 million, respectively. As of March 31, 2016, the weighted average period over which the unrecognized compensation expense is expected to be recognized is 20.22 months. |
EARNINGS PER SHARE DATA
EARNINGS PER SHARE DATA | 3 Months Ended |
Mar. 31, 2016 | |
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. For the three months ended March 31, 2016, 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 Three Months Ended March 31, 2016 2015 Basic: Weighted average shares outstanding 14,486 14,391 Net income (loss) attributable to DXP Enterprises, Inc. $ (5,112 ) $ 9,651 Convertible preferred stock dividend 23 23 Net income (loss) attributable to common shareholders $ (5,135 ) $ 9,628 Per share amount $ (0.35 ) $ 0.67 Diluted: Weighted average shares outstanding 14,486 14,391 Assumed conversion of convertible preferred stock - 840 Total dilutive shares 14,486 15,231 Net income (loss) attributable to common shareholders $ (5,135 ) $ 9,628 Convertible preferred stock dividend - 23 Net income (loss) attributable to DXP Enterprises, Inc. for diluted earnings per share $ (5,135 ) $ 9,651 Per share amount $ (0.35 ) $ 0.63 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 3 Months Ended |
Mar. 31, 2016 | |
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 prospectively 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 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 $8.7 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 values 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 at the date of purchase. Net capital charges for assets that contribute to projected cash flow were based on the estimated fair value of those assets. For the three months ended March 31, 2016, businesses acquired during 2015 contributed sales of $5.8 million and a loss before taxes of approximately $442 thousand. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed during 2015 in connection with the acquisitions described above ( in thousands 2015 TSI Cortech 1 Cash $ - $ - Accounts receivable, net 442 2,444 Inventory 475 1,243 Property & equipment 42 253 Goodwill and intangibles 4,929 13,897 Other assets 100 21 Assets acquired 5,988 17,858 Current liabilities assumed (335 ) (2,610 ) Non-current liabilities assumed (653 ) (349 ) Net assets acquired $ 5,000 $ 14,899 (1) Preliminary allocation. The pro forma unaudited results of operations for the Company on a consolidated basis for the three months ended March 31, 2015 compared to the March 31, 2016 actual amounts, assuming the acquisition of businesses completed in 2015 were consummated as of January 1, 2015 are as follows ( in thousands, except per share data Three Months Ended March 31, 2016 2015 Net sales $ 253,561 $ 347,438 Net income (loss) attributable to DXP Enterprises, Inc. $ (5,112 ) $ 10,145 Per share data attributable to DXP Enterprises, Inc. Basic earnings (loss) $ (0.35 ) $ 0.70 Diluted earnings (loss) $ (0.35 ) $ 0.67 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2016 | |
SEGMENT REPORTING [Abstract] | |
SEGMENT REPORTING | NOTE 14 - SEGMENT REPORTING The Company’s reportable business segments are: Service Centers, Innovative Pumping Solutions and Supply Chain Services. The Service Centers segment is engaged in providing maintenance, MRO products, equipment and integrated services, including logistics capabilities, to industrial customers. The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products and safety services categories. The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, remanufactures pumps and manufactures branded private label pumps. The Supply Chain Services segment provides a wide range of MRO products and manages all or part of a customer's supply chain, including warehouse and inventory management. The high degree of integration of the Company’s operations necessitates the use of a substantial number of allocations and apportionments in the determination of business segment information. Sales are shown net of intersegment eliminations. The following table sets out financial information relating the Company’s segments ( in thousands Three Months ended March 31, Service Centers IPS SCS Total 2016 Sales $ 167,502 $ 47,431 $ 38,628 $ 253,561 Operating income for reportable segments $ 9,536 $ 306 $ 3,480 $ 13,322 2015 Sales $ 225,792 $ 74,263 $ 41,539 $ 341,594 Operating income for reportable segments $ 22,866 $ 8,626 $ 3,279 $ 34,771 The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands Three Months Ended March 31, 2016 2015 Operating income for reportable segments $ 13,322 $ 34,771 Adjustment for: Amortization of intangibles 4,528 5,358 Corporate expense 10,796 11,314 Total operating income (loss) (2,002 ) 18,099 Interest expense 3,409 2,683 Other expense (income), net (155 ) (249 ) Income (loss) before income taxes $ (5,256 ) $ 15,665 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. While DXP is unable to predict the outcome of these lawsuits, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on DXP’s consolidated financial position, cash flows, or results of operations. |
SHARE REPURCHASES
SHARE REPURCHASES | 3 Months Ended |
Mar. 31, 2016 | |
SHARE REPURCHASES [Abstract] | |
SHARE REPURCHASES | NOTE 16 – SHARE REPURCHASES On December 17, 2014, DXP publicly announced an authorization from the Board of Directors that allows DXP from time to time to purchase up to 400,000 shares of DXP's common stock over 24 months. Purchases could be made in open market or in privately negotiated transactions. During the first quarter of 2015, DXP purchased 191,420 shares for $8.9 million under this authorization, leaving 208,580 shares still authorized as of March 31, 2016. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 - SUBSEQUENT EVENTS On May 12, 2016, DXP amended the Facility as follows: 1. Amended interest rates to be as follows: Pricing Level Consolidated Leverage Ratio Commitment Fee LIBOR Rate & CDOR Rate + Base Rate & Canadian Base Rate + I Less than 1.50 to 1.00 0.20% 1.75% 0.75% II Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00 0.25% 2.00% 1.00% III Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00 0.30% 2.25% 1.25% IV Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00 0.35% 2.50% 1.50% V Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00 0.40% 2.75% 1.75% VI Greater than or equal to 3.50 to 1.00 but less than 4.00 to 1.00 0.45% 3.00% 2.00% VII Greater than or equal to 4.00 to 1.00 0.50% 3.25% 2.25% This amendment increased the interest rates, other than the commitment fee, by 50 basis points on the date of this amendment. 2. Amended the definition Revolving Credit Commitment to $250,000,000, thereby reducing the commitment by $100,000,000. 3. Amended the maximum Consolidated Leverage Ratio covenant as follows: Period Maximum Ratio June 30, 2015 through December 31, 2015 4.25 to 1.00 January 1, 2016 through March 31, 2016 none April 1, 2016 through September 30, 2016 4.25 to 1.00 October 1, 2016 through December 31, 2016 4.00 to 1.00 January 1, 2017 through June 30, 2017 3.75 to 1.00 July 1, 2017 through December 31, 2017 3.50 to 1.00 January 1, 2018 and thereafter 3.25 to 1.00 The “none” period is due to a covenant holiday negotiated as part of this amendment. 4. Amended the minimum Consolidated Fixed Charge Coverage Ratio Covenant as follows: Period Minimum Ratio June 30, 2015 through December 31, 2015 1.15 to 1.00 January 1, 2016 through March 31, 2016 none April 1, 2016 through December 31, 2016 1.15 to 1.00 March 31, 2017 and thereafter 1.25 to 1.00 The “none” period is due to a covenant holiday negotiated as part of this amendment. 5. Amended the minimum Asset Coverage Ratio covenant as follows: Period Minimum Ratio March 31, 2016 through July 31, 2016 0.90 to 1.00 August 1, 2016 and thereafter 1.00 to 1.00 We have evaluated subsequent events through the date the interim condensed consolidated financial statements were issued. There were no additional subsequent events that required recognition or disclosure. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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”). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2015. In the opinion of management, these condensed consolidated financial statements contain all adjustments necessary to present fairly the Company’s condensed consolidated balance sheets as of December 31, 2015 and March 31, 2016 (unaudited), condensed consolidated statements of income and comprehensive income for the three ending March 31, 2015 and March 31, 2016 (unaudited), and condensed consolidated statements of cash flows for the three months ended March 31, 2015 and March 31, 2016 (unaudited). All such adjustments represent normal recurring items. 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 March 31, 2016, the total assets of the VIE were approximately $4.6 million including approximately $4.3 million of fixed assets. DXP is the sole customer of the VIE. Consolidation of the VIE increased cost of sales by approximately $0.4 million for the three months ended March 31, 2016. The Company recognized a related income tax benefit of $0.1 million related to the VIE for the three months ended March 31, 2016. At March 31, 2016, the owners of the 52.5% of the equity not owned by DXP included a former executive officer and other employees of DXP. The Company was not the primary beneficiary of the VIE for the three months ended March 31, 2015. Equity investments in which we exercise significant influence, but do not control and are not the primary beneficiary, are accounted for using the equity method of accounting. During the first quarter of 2016, DXP invested $4.0 million in a related party equity method investment which is included in “Prepaid expenses and other current assets” due to its short-term nature. A portion of the remaining interest in this investment is owned by the Company’s Chief Executive Officer. All intercompany accounts and transactions have been eliminated upon consolidation. |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
INVENTORIES, NET [Abstract] | |
Carrying Values of Inventories | The carrying values of inventories are as follows ( in thousands March 31, 2016 December 31, 2015 Finished goods $ 95,079 $ 94,524 Work in process 10,793 9,295 Inventories, net $ 105,872 $ 103,819 |
COSTS AND ESTIMATED PROFITS O25
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS [Abstract] | |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts | Costs and estimated profits on uncompleted contracts and related amounts billed were as follows (in thousands): March 31, 2016 December 31, 2015 Costs incurred on uncompleted contracts $ 36,331 $ 34,400 Estimated profits, thereon 14,493 13,119 Total 50,824 47,519 Less: billings to date 36,573 33,422 Net $ 14,251 $ 14,097 |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets | Such amounts were included in the accompanying condensed consolidated balance sheets for 2016 and 2015 under the following captions (in thousands): March 31, 2016 December 31, 2015 Costs and estimated profits in excess of billings on uncompleted contracts $ 18,389 $ 22,045 Billings in excess of costs and profits on uncompleted contracts (4,131 ) (8,021 ) Translation adjustment (7 ) 73 Net $ 14,251 $ 14,097 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
Carrying Values of Property and Equipment | The carrying values of property and equipment are as follows ( in thousands March 31, 2016 December 31, 2015 Land $ 2,386 $ 2,386 Buildings and leasehold improvements 16,687 16,631 Furniture, fixtures and equipment 104,944 102,494 Less – Accumulated depreciation (55,832 ) (53,008 ) Total property and equipment, net $ 68,185 $ 68,503 |
GOODWILL AND OTHER INTANGIBLE27
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 three months ended March 31, 2016 ( in thousands Goodwill Other Intangible Assets Total Balance as of December 31, 2015 $ 197,362 $ 112,297 $ 309,659 Purchase price adjustment (151 ) - (151 ) Translation adjustment - 1,188 1,188 Amortization - (4,528 ) (4,528 ) Balance as of March 31, 2016 $ 197,211 $ 108,957 $ 306,168 |
Goodwill Balance by Reportable Segment | The following table presents goodwill balance by reportable segment as of March 31, 2016 and December 31, 2015 (in thousands) March 31, 2016 December 31, 2015 Service Centers $ 164,093 $ 164,244 Innovative Pumping Solutions 15,980 15,980 Supply Chain Services 17,138 17,138 Total $ 197,211 $ 197,362 |
Amortizable Other Intangible Assets | The following table presents a summary of amortizable other intangible assets ( in thousands As of March 31, 2016 As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Carrying Amount, net Gross Carrying Amount Accumulated Amortization Carrying Amount, net Customer relationships 196,482 (87,915 ) 108,567 195,580 (83,741 ) 111,839 Non-compete agreements 1,805 (1,415 ) 390 1,815 (1,357 ) 458 Total $ 198,287 $ (89,330 ) $ 108,957 $ 197,395 $ (85,098 ) $ 112,297 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
LONG-TERM DEBT [Abstract] | |
Long-term Debt | Long-term debt consisted of the following at March 31, 2016 and December 31, 2015 ( in thousands March 31, 2016 December 31, 2015 Line of credit $ 198,139 $ 172,147 Term loan 162,500 175,000 Promissory note payable in monthly installments at 2.9% through January 2021, collateralized by equipment 4,203 4,408 Less unamortized debt issuance costs (1,321 ) (2,046 ) 363,521 349,509 Less: Current portion 363,521 (50,829 ) Long-term debt less current maturities $ - $ 298,680 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
STOCK-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 March 31, 2016: Number of shares authorized for grants 800,000 Number of shares granted (873,199 ) Number of shares forfeited 165,997 Number of shares available for future grants - (1) Weighted-average grant price of granted shares $ 28.40 (1) The Restricted Stock Plan expired in July of 2015. |
Changes in Restricted Stock | Changes in restricted stock for the three months ended March 31, 2016 were as follows: Number of Shares Weighted Average Grant Price Non-vested at December 31, 2015 137,507 $ 54.58 Granted - $ - Forfeited (22,121 ) $ 83.75 Vested (38,721 ) $ 50.11 Non-vested at March 31, 2016 76,665 $ 48.41 |
EARNINGS PER SHARE DATA (Tables
EARNINGS PER SHARE DATA (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 Three Months Ended March 31, 2016 2015 Basic: Weighted average shares outstanding 14,486 14,391 Net income (loss) attributable to DXP Enterprises, Inc. $ (5,112 ) $ 9,651 Convertible preferred stock dividend 23 23 Net income (loss) attributable to common shareholders $ (5,135 ) $ 9,628 Per share amount $ (0.35 ) $ 0.67 Diluted: Weighted average shares outstanding 14,486 14,391 Assumed conversion of convertible preferred stock - 840 Total dilutive shares 14,486 15,231 Net income (loss) attributable to common shareholders $ (5,135 ) $ 9,628 Convertible preferred stock dividend - 23 Net income (loss) attributable to DXP Enterprises, Inc. for diluted earnings per share $ (5,135 ) $ 9,651 Per share amount $ (0.35 ) $ 0.63 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 in connection with the acquisitions described above ( in thousands 2015 TSI Cortech 1 Cash $ - $ - Accounts receivable, net 442 2,444 Inventory 475 1,243 Property & equipment 42 253 Goodwill and intangibles 4,929 13,897 Other assets 100 21 Assets acquired 5,988 17,858 Current liabilities assumed (335 ) (2,610 ) Non-current liabilities assumed (653 ) (349 ) Net assets acquired $ 5,000 $ 14,899 (1) Preliminary allocation. |
Pro Forma Unaudited Results of Operations | The pro forma unaudited results of operations for the Company on a consolidated basis for the three months ended March 31, 2015 compared to the March 31, 2016 actual amounts, assuming the acquisition of businesses completed in 2015 were consummated as of January 1, 2015 are as follows ( in thousands, except per share data Three Months Ended March 31, 2016 2015 Net sales $ 253,561 $ 347,438 Net income (loss) attributable to DXP Enterprises, Inc. $ (5,112 ) $ 10,145 Per share data attributable to DXP Enterprises, Inc. Basic earnings (loss) $ (0.35 ) $ 0.70 Diluted earnings (loss) $ (0.35 ) $ 0.67 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
SEGMENT REPORTING [Abstract] | |
Segment Reporting Financial Information | The following table sets out financial information relating the Company’s segments ( in thousands Three Months ended March 31, Service Centers IPS SCS Total 2016 Sales $ 167,502 $ 47,431 $ 38,628 $ 253,561 Operating income for reportable segments $ 9,536 $ 306 $ 3,480 $ 13,322 2015 Sales $ 225,792 $ 74,263 $ 41,539 $ 341,594 Operating income for reportable segments $ 22,866 $ 8,626 $ 3,279 $ 34,771 |
Reconciliation of Operating Income for Reportable Segments to Consolidated Income before Taxes | The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands Three Months Ended March 31, 2016 2015 Operating income for reportable segments $ 13,322 $ 34,771 Adjustment for: Amortization of intangibles 4,528 5,358 Corporate expense 10,796 11,314 Total operating income (loss) (2,002 ) 18,099 Interest expense 3,409 2,683 Other expense (income), net (155 ) (249 ) Income (loss) before income taxes $ (5,256 ) $ 15,665 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
SUBSEQUENT EVENTS [Abstract] | |
Amended Interest Rates | 1. Amended interest rates to be as follows: Pricing Level Consolidated Leverage Ratio Commitment Fee LIBOR Rate & CDOR Rate + Base Rate & Canadian Base Rate + I Less than 1.50 to 1.00 0.20% 1.75% 0.75% II Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00 0.25% 2.00% 1.00% III Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00 0.30% 2.25% 1.25% IV Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00 0.35% 2.50% 1.50% V Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00 0.40% 2.75% 1.75% VI Greater than or equal to 3.50 to 1.00 but less than 4.00 to 1.00 0.45% 3.00% 2.00% VII Greater than or equal to 4.00 to 1.00 0.50% 3.25% 2.25% This amendment increased the interest rates, other than the commitment fee, by 50 basis points on the date of this amendment. |
Consolidated Leverage Ratio | 3. Amended the maximum Consolidated Leverage Ratio covenant as follows: Period Maximum Ratio June 30, 2015 through December 31, 2015 4.25 to 1.00 January 1, 2016 through March 31, 2016 none April 1, 2016 through September 30, 2016 4.25 to 1.00 October 1, 2016 through December 31, 2016 4.00 to 1.00 January 1, 2017 through June 30, 2017 3.75 to 1.00 July 1, 2017 through December 31, 2017 3.50 to 1.00 January 1, 2018 and thereafter 3.25 to 1.00 The “none” period is due to a covenant holiday negotiated as part of this amendment. |
Consolidated Fixed Charge Coverage Ratio | 4. Amended the minimum Consolidated Fixed Charge Coverage Ratio Covenant as follows: Period Minimum Ratio June 30, 2015 through December 31, 2015 1.15 to 1.00 January 1, 2016 through March 31, 2016 none April 1, 2016 through December 31, 2016 1.15 to 1.00 March 31, 2017 and thereafter 1.25 to 1.00 The “none” period is due to a covenant holiday negotiated as part of this amendment. |
Asset Coverage Ratio | 5. Amended the minimum Asset Coverage Ratio covenant as follows: Period Minimum Ratio March 31, 2016 through July 31, 2016 0.90 to 1.00 August 1, 2016 and thereafter 1.00 to 1.00 |
THE COMPANY (Details)
THE COMPANY (Details) | 3 Months Ended |
Mar. 31, 2016Segment | |
THE COMPANY [Abstract] | |
Number of segments | 3 |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Variable Interest Entity [Line Items] | ||
Ownership percentage in VIE | 47.50% | |
Assets of VIE | $ 4,600 | |
Increase cost of sales from consolidation of the VIE | 400 | |
Income tax benefit of VIE | 100 | |
Equity method investment | $ 4,000 | $ 0 |
Executive Officers and Other Employees of DXP [Member] | ||
Variable Interest Entity [Line Items] | ||
Ownership percentage in VIE | 52.50% | |
Fixed Assets [Member] | ||
Variable Interest Entity [Line Items] | ||
Assets of VIE | $ 4,300 |
FAIR VALUE OF FINANCIAL ASSET36
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill impairment expense | $ 68.7 | $ 68.7 |
Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated future cash flows discount rate | 10.00% | 10.00% |
Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated future cash flows discount rate | 11.50% | 11.50% |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
INVENTORIES, NET [Abstract] | ||
Finished goods | $ 95,079 | $ 94,524 |
Work in process | 10,793 | 9,295 |
Inventories, net | $ 105,872 | $ 103,819 |
COSTS AND ESTIMATED PROFITS O38
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of costs and estimated earnings on uncompleted contracts [Abstract] | ||
Costs incurred on uncompleted contracts | $ 36,331 | $ 34,400 |
Estimated profits, thereon | 14,493 | 13,119 |
Total | 50,824 | 47,519 |
Less: billings to date | 36,573 | 33,422 |
Net | 14,251 | 14,097 |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets [Abstract] | ||
Costs and estimated profits in excess of billings on uncompleted contracts | 18,389 | 22,045 |
Billings in excess of costs and profits on uncompleted contracts | (4,131) | (8,021) |
Translation adjustment | (7) | 73 |
Net | $ 14,251 | $ 14,097 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Less - Accumulated depreciation | $ (55,832) | $ (53,008) |
Total property and equipment, net | 68,185 | 68,503 |
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 | 16,687 | 16,631 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 104,944 | $ 102,494 |
GOODWILL AND OTHER INTANGIBLE40
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 197,362 | ||
Purchase price adjustment | (151) | ||
Translation adjustment | 0 | ||
Amortization | 0 | ||
Ending balance | 197,211 | ||
Other Intangibles Assets [Roll Forward] | |||
Balance at beginning of period | 112,297 | ||
Purchase price adjustment | 0 | ||
Translation adjustment | 1,188 | ||
Amortization | (4,528) | $ (5,358) | |
Balance at end of period | 108,957 | ||
Total Goodwill and Intangible Assets [Roll Forward] | |||
Beginning Balance | 309,659 | ||
Purchase price adjustment | (151) | ||
Translation adjustment | 1,188 | ||
Amortization | (4,528) | $ (5,358) | |
Ending Balance | 306,168 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 198,287 | $ 197,395 | |
Accumulated amortization | (89,330) | (85,098) | |
Carrying amount, net | 108,957 | 112,297 | |
Service Centers [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 164,244 | ||
Ending balance | 164,093 | ||
Innovative Pumping Solutions [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 15,980 | ||
Ending balance | 15,980 | ||
Supply Chain Services [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 17,138 | ||
Ending balance | 17,138 | ||
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 196,482 | 195,580 | |
Accumulated amortization | (87,915) | (83,741) | |
Carrying amount, net | 108,567 | 111,839 | |
Non-Compete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 1,805 | 1,815 | |
Accumulated amortization | (1,415) | (1,357) | |
Carrying amount, net | $ 390 | $ 458 |
GOODWILL AND OTHER INTANGIBLE41
GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill balance by reportable segment (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | ||
Amount of aggregate goodwill | $ 197,211 | $ 197,362 |
Service Centers [Member] | ||
Goodwill [Line Items] | ||
Amount of aggregate goodwill | 164,093 | 164,244 |
Innovative Pumping Solutions [Member] | ||
Goodwill [Line Items] | ||
Amount of aggregate goodwill | 15,980 | 15,980 |
Supply Chain Services [Member] | ||
Goodwill [Line Items] | ||
Amount of aggregate goodwill | $ 17,138 | $ 17,138 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | May. 12, 2016USD ($) | Mar. 31, 2016USD ($)Covenant | Dec. 31, 2015USD ($) |
Borrowings [Abstract] | |||
Long-term debt | $ 363,521,000 | $ 349,509,000 | |
Less unamortized debt issuance costs | (1,321,000) | (2,046,000) | |
Less: Current portion | (363,521,000) | (50,829,000) | |
Long-term debt, less current maturities | 0 | 298,680,000 | |
Line of Credit [Member] | |||
Borrowings [Abstract] | |||
Long-term debt | 198,139,000 | 172,147,000 | |
Term Loan [Member] | |||
Borrowings [Abstract] | |||
Long-term debt | 162,500,000 | 175,000,000 | |
Promissory Note Payable [Member] | |||
Borrowings [Abstract] | |||
Long-term debt | $ 4,203,000 | $ 4,408,000 | |
Interest rate | 2.90% | 2.90% | |
Wells Fargo Bank, National Association [Member] | Term Loan [Member] | |||
Borrowings [Abstract] | |||
Maximum borrowing capacity | $ 250,000,000 | ||
Amount outstanding | $ 162,500,000 | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | |||
Borrowings [Abstract] | |||
Number of financial covenants under the facility | Covenant | 2 | ||
Maximum cash balance calculated on average thirty day balance | $ 3,000,000 | ||
Maximum borrowing capacity | $ 350,000,000 | ||
Commitment fee | 0.50% | ||
Amount outstanding | $ 360,600,000 | ||
Debt amortization expenses payable per quarter current year | 12,500,000 | ||
Debt amortization expenses payable per quarter in year two and thereafter | $ 15,625,000 | ||
Consolidated leverage ratio | 4 | ||
Weighted average interest rate | 2.69% | ||
Available for borrowing under the facility | $ 22,300,000 | ||
Expiration date | Jan. 2, 2019 | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | |||
Borrowings [Abstract] | |||
Decrease in borrowing capacity | $ (100,000,000) | ||
Maximum borrowing capacity | $ 250,000,000 | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||
Borrowings [Abstract] | |||
Minimum asset coverage ratio | 0.90 | ||
Commitment fee | 0.20% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||
Borrowings [Abstract] | |||
Minimum asset coverage ratio | 1 | ||
Commitment fee | 0.50% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | |||
Borrowings [Abstract] | |||
Base rate | LIBOR | ||
Basis spread on base rate | 2.25% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Subsequent Event [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 3.25% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 1.75% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 3.25% | ||
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] | Subsequent Event [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 2.25% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Prime rate [Member] | Minimum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 0.75% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Prime rate [Member] | Maximum [Member] | |||
Borrowings [Abstract] | |||
Basis spread on base rate | 2.25% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | ||
Weighted Average Grant Price [Roll Forward] | ||||
Stock compensation expense | $ 766 | $ 812 | ||
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 | |||
Award vesting period | 1 year | |||
Number of shares granted (in shares) | 0 | |||
Number of shares forfeited (in shares) | 22,121 | |||
Restricted Stock [Roll Forward] | ||||
Non-vested, beginning balance (in shares) | 137,507 | |||
Granted (in shares) | 0 | |||
Forfeited (in shares) | (22,121) | |||
Vested (in shares) | (38,721) | |||
Non-vested, ending balance (in shares) | 76,665 | |||
Weighted Average Grant Price [Roll Forward] | ||||
Non-vested, beginning balance (in dollars per share) | $ 54.58 | |||
Granted (in dollars per share) | 0 | |||
Forfeitures (in dollars per share) | 83.75 | |||
Vested (in dollars per share) | 50.11 | |||
Non-vested, ending balance (in dollars per share) | $ 48.41 | |||
Stock compensation expense | $ 800 | $ 800 | ||
Related income tax losses recognized | 500 | |||
Unrecognized compensation expense | $ 3,300 | $ 4,000 | ||
Compensation cost not yet recognized, Period for recognition | 20 months 7 days | |||
Restricted Stock Plan [Member] | Restricted Stock [Member] | ||||
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) | (873,199) | |||
Number of shares forfeited (in shares) | 165,997 | |||
Number of shares available for future grants (in shares) | [1] | 0 | ||
Restricted Stock [Roll Forward] | ||||
Granted (in shares) | 873,199 | |||
Forfeited (in shares) | (165,997) | |||
Weighted Average Grant Price [Roll Forward] | ||||
Granted (in dollars per share) | $ 28.40 | |||
[1] | The Restricted Stock Plan expired in July of 2015. |
EARNINGS PER SHARE DATA (Detail
EARNINGS PER SHARE DATA (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Basic [Abstract] | ||
Weighted average shares outstanding (in shares) | 14,486,000 | 14,391,000 |
Net income (loss) attributable to DXP Enterprises, Inc. | $ (5,112) | $ 9,651 |
Convertible preferred stock dividend | 23 | 23 |
Net income (loss) attributable to common shareholders | $ (5,135) | $ 9,628 |
Per share amount (in dollars per share) | $ (0.35) | $ 0.67 |
Diluted [Abstract] | ||
Weighted average shares outstanding (in shares) | 14,486,000 | 14,391,000 |
Assumed conversion of convertible preferred stock (in shares) | 0 | 840,000 |
Total dilutive shares (in shares) | 14,486,000 | 15,231,000 |
Net income (loss) attributable to common shareholders | $ (5,135) | $ 9,628 |
Convertible preferred stock dividend | 0 | 23 |
Net income (loss) attributable to DXP Enterprises, Inc. for diluted earnings per share | $ (5,135) | $ 9,651 |
Per share amount (in dollars per share) | $ (0.35) | $ 0.63 |
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 |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 01, 2015 | Apr. 01, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Apr. 02, 2015 | |
Purchase price allocation [Abstract] | |||||||
Goodwill acquired | $ 197,211 | $ 197,362 | |||||
Pro Forma Information [Abstract] | |||||||
Net sales | 253,561 | $ 347,438 | |||||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (5,112) | $ 10,145 | |||||
Per share data attributable to DXP Enterprises, Inc. [Abstract] | |||||||
Basic earnings (loss) (in dollars per share) | $ (0.35) | $ 0.70 | |||||
Diluted earnings (loss) (in dollars per share) | $ (0.35) | $ 0.67 | |||||
Business Acquired during 2015 [Member] | |||||||
Purchase price allocation [Abstract] | |||||||
Sales from business acquisitions | $ 5,800 | ||||||
Loss before taxes and impairment from business acquisitions | $ (442) | ||||||
Tool Supply, Inc. [Member] | |||||||
Purchase price allocation [Abstract] | |||||||
Cash | $ 0 | ||||||
Accounts receivable, net | 442 | ||||||
Inventory | 475 | ||||||
Property & equipment | 42 | ||||||
Goodwill and intangibles | 4,929 | ||||||
Other assets | 100 | ||||||
Assets acquired | 5,988 | ||||||
Current liabilities assumed | (335) | ||||||
Non-current liabilities assumed | (653) | ||||||
Net assets acquired | 5,000 | ||||||
Purchase price | $ 5,000 | ||||||
Goodwill acquired | 2,900 | ||||||
Intangible assets acquired | $ 2,000 | ||||||
Cortech Engineering, LLC [Member] | |||||||
Purchase price allocation [Abstract] | |||||||
Cash | [1] | $ 0 | |||||
Accounts receivable, net | [1] | 2,444 | |||||
Inventory | [1] | 1,243 | |||||
Property & equipment | [1] | 253 | |||||
Goodwill and intangibles | [1] | 13,897 | |||||
Other assets | [1] | 21 | |||||
Assets acquired | [1] | 17,858 | |||||
Current liabilities assumed | [1] | (2,610) | |||||
Non-current liabilities assumed | [1] | (349) | |||||
Net assets acquired | [1] | 14,899 | |||||
Purchase price | 14,900 | ||||||
Purchase price financed under common stock issued | $ 4,400 | ||||||
Number of shares issued on acquisition (in shares) | 148,800 | ||||||
Goodwill acquired | $ 8,700 | ||||||
Intangible assets acquired | 5,200 | ||||||
Nontax deductible goodwill or intangible assets | $ 4,500 | ||||||
[1] | Preliminary allocation. |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Sales | $ 253,561 | $ 341,594 |
Operating income for reportable segments | 13,322 | 34,771 |
Adjustment for [Abstract] | ||
Amortization of intangibles | 4,528 | 5,358 |
Corporate expense | 10,796 | 11,314 |
Total operating income (loss) | (2,002) | 18,099 |
Interest expense | 3,409 | 2,683 |
Other expense (income), net | (155) | (249) |
Income (loss) before income taxes | (5,256) | 15,665 |
Operating Segments [Member] | Service Centers [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 167,502 | 225,792 |
Operating income for reportable segments | 9,536 | 22,866 |
Operating Segments [Member] | IPS [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 47,431 | 74,263 |
Operating income for reportable segments | 306 | 8,626 |
Operating Segments [Member] | SCS [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales | 38,628 | 41,539 |
Operating income for reportable segments | $ 3,480 | $ 3,279 |
SHARE REPURCHASES (Details)
SHARE REPURCHASES (Details) - USD ($) $ in Millions | Dec. 17, 2014 | Mar. 31, 2015 | Mar. 31, 2016 |
SHARE REPURCHASES [Abstract] | |||
Number of shares authorized to repurchase (in shares) | 400,000 | ||
Authorized repurchase period | 24 months | ||
Share repurchased (in shares) | 191,420 | ||
Value of treasury acquired | $ 8.9 | ||
Remaining number of shares authorized to be repurchased (in shares) | 208,850 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | May. 12, 2016USD ($) | Mar. 31, 2016USD ($) | |
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.50% | ||
Maximum borrowing capacity | $ 350,000,000 | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.20% | ||
Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.50% | ||
Subsequent Event [Member] | Minimum [Member] | |||
Consolidated Fixed Charge Coverage Ratio Covenant [Abstract] | |||
June 30, 2015 through December 31, 2015 | 1.15 | ||
January 1, 2016 through March 31, 2016 | [1] | ||
April 1, 2016 through December 31, 2016 | 1.15 | ||
March 31, 2017 and thereafter | 1.25 | ||
Asset Coverage Ratio Covenant [Abstract] | |||
March 31, 2016 through July 31, 2016 | 0.90 | ||
August 1, 2016 and thereafter | 1 | ||
Subsequent Event [Member] | Maximum [Member] | |||
Consolidated Leverage Ratio Covenant [Abstract] | |||
June 30, 2015 through December 31, 2015 | 4.25 | ||
January 1, 2016 through March 31, 2016 | [1] | ||
April 1, 2016 through September 30, 2016 | 4.25 | ||
October 1, 2016 through December 31, 2016 | 4 | ||
January 1, 2017 through June 30, 2017 | 3.75 | ||
July 1, 2017 through December 31, 2017 | 3.50 | ||
January 1, 2018 and thereafter | 3.25 | ||
Subsequent Event [Member] | Wells Fargo Bank, National Association [Member] | Revolving Credit Facility [Member] | |||
Subsequent Event [Line Items] | |||
Increase (decrease) in basis spread on base rate | 0.50% | ||
Maximum borrowing capacity | $ 250,000,000 | ||
Decrease in borrowing capacity | $ (100,000,000) | ||
Subsequent Event [Member] | Pricing Level One [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.20% | ||
Leverage ratio | 1.50% | ||
Subsequent Event [Member] | Pricing Level One [Member] | LIBOR Rate & CDOR Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 1.75% | ||
Subsequent Event [Member] | Pricing Level One [Member] | Base Rate & Canadian Base Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 0.75% | ||
Subsequent Event [Member] | Pricing Level Two [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.25% | ||
Subsequent Event [Member] | Pricing Level Two [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 1.50% | ||
Subsequent Event [Member] | Pricing Level Two [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 2.00% | ||
Subsequent Event [Member] | Pricing Level Two [Member] | LIBOR Rate & CDOR Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 2.00% | ||
Subsequent Event [Member] | Pricing Level Two [Member] | Base Rate & Canadian Base Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 1.00% | ||
Subsequent Event [Member] | Pricing Level Three [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.30% | ||
Subsequent Event [Member] | Pricing Level Three [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 2.00% | ||
Subsequent Event [Member] | Pricing Level Three [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 2.50% | ||
Subsequent Event [Member] | Pricing Level Three [Member] | LIBOR Rate & CDOR Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 2.25% | ||
Subsequent Event [Member] | Pricing Level Three [Member] | Base Rate & Canadian Base Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 1.25% | ||
Subsequent Event [Member] | Pricing Level Four [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.35% | ||
Subsequent Event [Member] | Pricing Level Four [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 2.50% | ||
Subsequent Event [Member] | Pricing Level Four [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 3.00% | ||
Subsequent Event [Member] | Pricing Level Four [Member] | LIBOR Rate & CDOR Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 2.50% | ||
Subsequent Event [Member] | Pricing Level Four [Member] | Base Rate & Canadian Base Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 1.50% | ||
Subsequent Event [Member] | Pricing Level Five [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.40% | ||
Subsequent Event [Member] | Pricing Level Five [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 3.00% | ||
Subsequent Event [Member] | Pricing Level Five [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 3.50% | ||
Subsequent Event [Member] | Pricing Level Five [Member] | LIBOR Rate & CDOR Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 2.75% | ||
Subsequent Event [Member] | Pricing Level Five [Member] | Base Rate & Canadian Base Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 1.75% | ||
Subsequent Event [Member] | Pricing Level Six [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.45% | ||
Subsequent Event [Member] | Pricing Level Six [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 3.50% | ||
Subsequent Event [Member] | Pricing Level Six [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Leverage ratio | 4.00% | ||
Subsequent Event [Member] | Pricing Level Six [Member] | LIBOR Rate & CDOR Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 3.00% | ||
Subsequent Event [Member] | Pricing Level Six [Member] | Base Rate & Canadian Base Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 2.00% | ||
Subsequent Event [Member] | Pricing Level Seven [Member] | |||
Subsequent Event [Line Items] | |||
Commitment fee | 0.50% | ||
Leverage ratio | 4.00% | ||
Subsequent Event [Member] | Pricing Level Seven [Member] | LIBOR Rate & CDOR Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 3.25% | ||
Subsequent Event [Member] | Pricing Level Seven [Member] | Base Rate & Canadian Base Rate [Member] | |||
Subsequent Event [Line Items] | |||
Base rate | 2.25% | ||
[1] | none |