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LONG-TERM DEBT | 6 Months Ended
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Jun. 30, 2016
LONG-TERM DEBT [Abstract] |
LONG-TERM DEBT | NOTE 10 – LONG-TERM DEBT Long-term debt consisted of the following at June 30, 2016 and December 31, 2015 (in thousands):
|  | June 30, 2016 |  |  | December 31, 2015 |
Line of credit |  | $ | 193,738 |  |  | $ | 172,147 |
Term loan |  |  | 150,000 |  |  |  | 175,000 |
Promissory note payable in monthly installments at 2.9% through January 2021, collateralized by equipment |  |  | 3,996 |  |  |  | 4,408 |
Less unamortized debt issuance costs |  |  | (602 | ) |  |  | (2,046 | )
|  |  | 347,132 |  |  |  | 349,509 |
Less: Current portion |  |  | (112,091 | ) |  |  | (50,829 | )
Long-term debt less current maturities |  | $ | 235,041 |  |  | $ | 298,680 |
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”), that certain Third Amendment to Amended and Restated Credit Agreement, dated as of May 12, 2016 (the “Third Amendment”), and that certain Fourth Amendment to the Amended and Restated Credit Agreement, dated as of August 15, 2016 (the “Fourth Amendment”), the “Facility”), amending and restating the Original Facility. Pursuant to the Facility, as of August 15, 2016, the lenders named therein provided to DXP a $150 million term loan and a $205 million revolving line of credit. The Facility expires on March 31, 2018. Loans made from the Facility may be used for working capital and general corporate purposes of DXP and its subsidiaries. As of June 30, 2016, the aggregate principal amount of revolving loans outstanding under the facility was $193.7 million. 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 September 30, 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. The Fourth Amendment requires additional term loan principal reductions of $17 million by December 31, 2016 and $14 million by March 31, 2017. At June 30, 2016, the aggregate principal amount of term loans outstanding under the Facility was $150.0 million. Under the terms of the Fourth Amendment:
| · | The revolving line of credit was reduced from $250 million to $205 million, as of August 15, 2016, and shall be reduced to $190 million, as of March 31, 2017.
| · | A permitted overadvance facility (the “Permitted Overadvance Facility”) has been added with amounts to be determined but which shall permit drawings in excess of the ratio of (i) the sum of 85% of net accounts receivable and 65% of net inventory to (ii) the aggregate amount of revolving credit outstandings (the “Asset Coverage Ratio”).
| · | Certain modifications were made to the pricing grid set forth in the Facility to increase the rate at which the Facility bears interest to a rate equal to LIBOR (or CDOR for Canadian dollar loans) plus 5.00% and Base Rate (or Canadian Base Rate for Canadian dollar loans) plus 4.00%; provided, that drawings under the Permitted Overadvance Facility shall bear interest at a rate equal to LIBOR (or CDOR for Canadian dollar loans) plus 6.00% and Base Rate (or Canadian Base Rate for Canadian dollar loans) plus 5.00%
| · | The maturity date of the Facility was modified from January 2, 2019 to March 31, 2018.
| · | Additional mandatory prepayments were added in an amount equal to $30 million (including $17 million to be applied to the term loan) by December 31, 2016 and $25 million (including $14 million to be applied to the term loan) by March 31, 2017.
| · | The negative covenants were modified to reduce certain debt baskets, including for purchase money, capital lease and unsecured debt and to limit the ability of the Company to conduct asset sales in excess of $3.5 million without the consent of the Required Lenders.
| · | A financial covenant holiday has been provided through June 30, 1017 for the Consolidated Leverage Ratio and the Consolidated Fixed Charge Ratio.
| · | The minimum Asset Coverage Ratio was adjusted to .95 to 1.00 beginning June 30, 2016.
| · | A minimum EBITDA and capital expenditure covenant were added to the Facility.”
On June 30, 2016, the LIBOR based rate in effect under the Facility was LIBOR plus 3.25%, the prime based rate of the Facility was prime plus 2.25%. The Fourth Amendment increased the LIBOR based rate under the Facility to LIBOR plus 5.0% and the prime based rate of the Facility to prime plus 4.0% as of August 15, 2016. At June 30, 2016, $343.7 million was borrowed under the Facility at a weighted average interest rate of approximately 3.72% under the LIBOR options. At June 30, 2016, the Company had $10.1 million available for borrowing under the Facility. Commitment fees of 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 condensed consolidated statements of operations. 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 month end. Substantially all of the Company’s assets are pledged as collateral to secure the Facility.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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