<SEC-DOCUMENT>0001193125-16-705517.txt : 20160908
<SEC-HEADER>0001193125-16-705517.hdr.sgml : 20160908
<ACCEPTANCE-DATETIME>20160908172055
ACCESSION NUMBER:		0001193125-16-705517
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20160908
ITEM INFORMATION:		Other Events
FILED AS OF DATE:		20160908
DATE AS OF CHANGE:		20160908

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DXP ENTERPRISES INC
		CENTRAL INDEX KEY:			0001020710
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-INDUSTRIAL MACHINERY & EQUIPMENT [5084]
		IRS NUMBER:				760509661
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0727

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21513
		FILM NUMBER:		161877144

	BUSINESS ADDRESS:	
		STREET 1:		7272 PINEMONT DRIVE
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77040
		BUSINESS PHONE:		7139964700

	MAIL ADDRESS:	
		STREET 1:		7272 PINEMONT DRIVE
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77040

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INDEX INC
		DATE OF NAME CHANGE:	19960808
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d255116d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
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 <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:4pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>UNITED STATES </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Washington, D.C. 20549 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>Form 8-K
</B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>CURRENT REPORT </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>PURSUANT
TO SECTION 13 OR 15(d) </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>OF THE SECURITIES EXCHANGE ACT OF 1934 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Date of Report (date of earliest event reported): September&nbsp;8, 2016 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Commission file number 000-21513 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:24pt; font-family:Times New Roman" ALIGN="center"><B>DXP
Enterprises, Inc. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Exact name of registrant as specified in its charter) </B></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><B>Texas</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>76-0509661</B></TD></TR>
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<TD VALIGN="top" ALIGN="center"><B>(State or other jurisdiction of incorporation or organization)</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>(I.R.S. Employer Identification Number)</B></TD></TR>
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<TD VALIGN="top" ALIGN="center"><B>7272 Pinemont, Houston, Texas 77040</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>(713) 996-4700</B></TD></TR>
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<TD VALIGN="top" ALIGN="center"><B>(Address of principal executive offices)</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>Registrant&#146;s telephone number, including area code.</B></TD></TR>
</TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </TD></TR></TABLE> <P STYLE="font-size:10pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Item&nbsp;8.01. Other Events. </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As previously disclosed on its Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the &#147;SEC&#148;) on August&nbsp;15, 2016,
DXP Enterprises, Inc. (the &#147;Company&#148;) entered into the fourth amendment to its amended and restated credit agreement, dated as of August&nbsp;15, 2016, by and among the Company, the borrower and lender parties thereto and Wells Fargo Bank
National Association as administrative agent. The fourth amendment amended that certain amended and restated credit agreement, dated as of January&nbsp;2,&nbsp;2014, by and among the Company, the borrower and lender parties thereto and Wells Fargo
Bank National Association, as Issuing Lender, Swingline Lender and Administrative Agent (as supplemented and amended, the &#147;Facility&#148;). In light of the Company entering into the fourth amendment to its Facility, it desires to add the
following risk factors to its disclosure related to the Facility. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Risk Factors </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>There can be no assurance that we will be able to pay the additional mandatory principal payments of $55 million as required by the fourth amendment to our
credit facility in addition to the existing requirement to pay approximately $41 million in principal by March&nbsp;31, 2017, as required by the terms of our credit facility, as amended. </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Fourth Amendment to the Amended and Restated Credit Agreement, dated as of August&nbsp;15, 2016 (the &#147;Fourth Amendment&#148;), requires additional
mandatory prepayments in an amount equal to $30 million (including $17 million to be applied to the term loan) by December&nbsp;31, 2016 and $25 million (including $14 million to be applied to the term loan) by March&nbsp;31, 2017. These payments
are in addition to the Company&#146;s previously existing obligation under the credit facility to make principal payments on the last business day of each fiscal quarter in an amount of $12.5 million per quarter for the fiscal quarter periods ending
September&nbsp;30, 2016 through and including December&nbsp;31, 2016, and $15.625 million per quarter for the fiscal quarter periods ending March&nbsp;31,&nbsp;2017 through March&nbsp;31, 2018. If the Company is unsuccessful in raising capital
through debt or equity financings, or the sale of non-core assets, the Company may not be able to meet these required payments. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>A further
deterioration in the oil and gas sector or other circumstances may negatively impact our business and results of operations and thus hinder our ability to comply with financial covenants under our credit facility, including the Consolidated EBITDA
financial covenant. </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">A further deterioration of the oil and gas sector or other circumstances that reduce our earnings may hinder our ability to
comply with certain financial covenants under our credit facility. Specifically, compliance with the Consolidated EBITDA covenant depends on our ability to maintain net income and prevent losses. There can be no assurance that in the future the
Company will be able to comply with the covenants or, if it is not able to do so, that its lenders will be willing to waive such non-compliance or further amend such covenants. If it is unable to comply with its financial covenants or obtain a
waiver or amendment of those covenants or obtain alternative financing, the Company&#146;s business and financial condition would be adversely affected. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>We likely will need to amend our credit facility or obtain alternative financing during the next eighteen months. </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Because our credit facility, as amended by the Fourth Amendment, matures on March&nbsp;31, 2018, and the financial covenants become more restrictive after
June&nbsp;30, 2017, we will need to amend our credit facility or obtain alternative financing including additional debt and/or equity during the next two years. 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. Our ability to amend the credit facility or to obtain alternative financing on attractive
terms, if at all, may be affected by our recent difficulty meeting the financial covenants in the credit facility and will depend in part on prevailing economic conditions and other factors, including factors beyond the Company&#146;s control. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Other Matters </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Under the terms of the Fourth Amendment to
our Facility, a financial covenant holiday was provided through June&nbsp;30, 2017 for the Consolidated Leverage Ratio and Consolidated Fixed Charge Ratio. However, in the Company&#146;s Form 10-Q for the quarter ended June&nbsp;30, 2016, a
paragraph regarding the Company&#146;s Consolidated Leverage Ratio under the Facility was inadvertently duplicated and the following paragraph was omitted. This paragraph should be read with the disclosure on the top of page 23 of such Form 10-Q.
</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>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 1.25 to 1.00 from July&nbsp;1, 2017 and thereafter, with &#147;Consolidated Fixed Charge Coverage Ratio&#148; defined as the ratio of (a)&nbsp;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)&nbsp;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 June&nbsp;30, 2016,
the Company&#146;s Consolidated Fixed Charge Coverage Ratio was 0.75 to 1.00, but the Facility does not require compliance with the Consolidated Fixed Charge Coverage Ratio from June&nbsp;30, 2016 through June&nbsp;30, 2017. </I></P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">SIGNATURE </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom" COLSPAN="3">DXP ENTERPRISES, INC.</TD></TR>
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<TD VALIGN="top">September&nbsp;8, 2016</TD>
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<TD VALIGN="bottom">By:</TD>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Mac McConnell</P></TD></TR>
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<TD VALIGN="bottom">Mac McConnell</TD></TR>
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<TD VALIGN="bottom">Senior Vice President/Finance, Chief Financial Officer and Secretary</TD></TR>
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