Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-21513 | |
Entity Registrant Name | DXP Enterprises, Inc. | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 76-0509661 | |
Entity Address, Address Line One | 5301 Hollister | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77040 | |
City Area Code | 713 | |
Local Phone Number | 996-4700 | |
Title of 12(b) Security | Common Stock par value $0.01 | |
Trading Symbol | DXPE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,790,717 | |
Entity Central Index Key | 0001020710 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |||
Income Statement [Abstract] | ||||||
Sales | $ 220,193 | $ 327,178 | $ 772,577 | $ 971,721 | ||
Cost of sales | 158,892 | 234,474 | 557,595 | 702,830 | ||
Gross profit | 61,301 | 92,704 | 214,982 | 268,891 | ||
Selling, general and administrative expenses | 53,746 | 70,987 | 189,759 | 209,511 | ||
Impairment and other charges | 48,401 | 0 | 48,401 | 0 | ||
Income (loss) from operations | (40,846) | 21,717 | (23,178) | 59,380 | ||
Other expense (income) | 320 | (25) | (381) | 127 | ||
Interest expense | 3,752 | 4,986 | 12,059 | 14,911 | ||
Income (loss) before income taxes | (44,918) | 16,756 | (34,856) | 44,342 | ||
Provision for income taxes (benefit) | (10,143) | 3,606 | (7,809) | 10,655 | ||
Net income (loss) | (34,775) | 13,150 | (27,047) | 33,687 | ||
Net (loss) attributable to noncontrolling interest | (109) | 41 | (233) | (172) | ||
Net income (loss) attributable to DXP Enterprises, Inc. | (34,666) | 13,109 | (26,814) | 33,859 | ||
Preferred stock dividend | 23 | 23 | 68 | 68 | ||
Net income (loss) attributable to common shareholders | (34,689) | 13,086 | (26,882) | 33,791 | ||
Net income (loss) | (34,775) | 13,150 | (27,047) | 33,687 | ||
Currency translation adjustments | (452) | (1,281) | (220) | (718) | ||
Comprehensive income (loss) | $ (35,227) | $ 11,869 | $ (27,267) | $ 32,969 | ||
Earnings (loss) per share (Note 11) : | ||||||
Basic (in dollars per share) | $ (1.95) | $ 0.74 | $ (1.52) | $ 1.92 | ||
Diluted (in dollars per share) | $ (1.95) | [1] | $ 0.71 | $ (1.52) | [1] | $ 1.84 |
Weighted average common shares outstanding : | ||||||
Basic (in shares) | 17,790 | 17,602 | 17,743 | 17,588 | ||
Diluted (in shares) | 17,790 | [1] | 18,442 | 17,743 | [1] | 18,428 |
Antidilutive convertible preferred securities excluded from diluted earnings per share calculation (in shares) | 840 | 840 | ||||
[1] |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 97,287 | $ 54,203 |
Restricted cash | 91 | 124 |
Accounts Receivable, net of allowance of $8,441 and $8,929 | 152,013 | 187,116 |
Inventories | 118,864 | 129,364 |
Costs and estimated profits in excess of billings | 21,544 | 32,455 |
Prepaid expenses and other current assets | 6,061 | 4,223 |
Federal income taxes receivable | 6,834 | 996 |
Total current assets | 402,694 | 408,481 |
Property and equipment, net | 57,452 | 63,703 |
Goodwill | 166,375 | 194,052 |
Other intangible assets, net | 47,616 | 52,582 |
Operating lease ROU assets | 58,657 | 66,191 |
Other long-term assets | 3,924 | 3,211 |
Total assets | 736,718 | 788,220 |
Current liabilities: | ||
Current maturities of long-term debt | 2,500 | 2,500 |
Trade accounts payable | 81,570 | 76,438 |
Accrued wages and benefits | 21,121 | 23,412 |
Customer advances | 9,185 | 3,408 |
Billings in excess of costs and estimated profits | 4,168 | 11,871 |
Short-term operating lease liabilities | 16,605 | 17,603 |
Other current liabilities | 20,723 | 12,939 |
Total current liabilities | 155,872 | 148,171 |
Long-term debt, net of unamortized debt issuance costs | 209,813 | 235,419 |
Long-term operating lease liabilities | 41,324 | 48,605 |
Other long-term liabilities | 2,007 | 1,205 |
Deferred income taxes | 4,148 | 9,872 |
Total long-term liabilities | 257,292 | 295,101 |
Total liabilities | 413,164 | 443,272 |
Commitments and contingencies (Note 12) | ||
Shareholders' Equity: | ||
Series A and B preferred stock, $1.00 par value each; 1,000,000 shares authorized each | 16 | 16 |
Common stock, $0.01 par value, 100,000,000 shares authorized; 17,790,717 and 17,604,092 outstanding | 175 | 174 |
Additional paid-in capital | 164,054 | 157,886 |
Retained earnings | 178,570 | 205,680 |
Accumulated other comprehensive loss | (20,174) | (19,954) |
Total DXP Enterprises, Inc. Equity | 322,641 | 343,802 |
Noncontrolling interest | 913 | 1,146 |
Total Equity | 323,554 | 344,948 |
Total liabilities and Equity | $ 736,718 | $ 788,220 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Allowance for accounts receivable | $ 8,441 | $ 8,929 |
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 outstanding (in shares) | 17,790,717 | 17,604,092 |
Series A preferred stock | ||
Shareholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Series B preferred stock | ||
Shareholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (26,814) | $ 33,859 |
Less: net loss attributable to non-controlling interest | (233) | (172) |
Net income (loss) | (27,047) | 33,687 |
Reconciliation of net income (loss) to net cash provided by operating activities: | ||
Depreciation | 7,998 | 7,270 |
Amortization of intangible assets | 9,296 | 11,423 |
Gain on sale of property and equipment | 0 | (9) |
Bad debt expense (recoveries) | 788 | (75) |
Impairment and other charges | 48,401 | 0 |
Payment of contingent consideration liability in excess of acquisition-date fair value | (136) | (106) |
Fair value adjustment on contingent consideration | 13 | 101 |
Amortization of debt issuance costs | 1,406 | 1,406 |
Stock compensation expense | 2,870 | 1,502 |
Deferred income taxes | (6,477) | 2,337 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 37,212 | (17,581) |
Costs and estimated profits in excess of billings | 10,876 | (1,371) |
Inventories | 4,533 | (17,039) |
Prepaid expenses and other assets | 4,990 | 1,786 |
Trade accounts payable and accrued expenses | 11,710 | (6,301) |
Billings in excess of costs and estimated profits | (7,702) | (3,524) |
Other long-term liabilities | (6,491) | (6,021) |
Net cash provided by operating activities | 92,240 | 7,485 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (6,530) | (14,247) |
Proceeds from the sale of property and equipment | 123 | 35 |
Acquisition of business, net of cash acquired | (14,118) | 0 |
Net cash used in investing activities | (20,525) | (14,212) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal debt payments | (26,875) | (3,716) |
Issuance of Common Stock sold in public market | 1,142 | 0 |
Payment for contingent consideration liability | (1,864) | (1,394) |
Dividends paid | (68) | (68) |
Debt issuance costs | (138) | 0 |
Payment for employee taxes withheld from stock awards | (139) | (266) |
Net cash used in financing activities | (27,942) | (5,444) |
Effect of foreign currency on cash | (721) | 213 |
Net change in cash and restricted cash | 43,052 | (11,958) |
Cash and restricted cash at beginning of period | 54,326 | 40,519 |
Cash and restricted cash at end of period | $ 97,378 | $ 28,561 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common stock | Paid-in capital | Retained earnings | Non controlling interest | Accum other comp loss | Series A preferred stock | Series B preferred stock |
Beginning Balance at Dec. 31, 2018 | $ 308,254 | $ 174 | $ 156,190 | $ 169,735 | $ 1,406 | $ (19,267) | $ 1 | $ 15 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (68) | (68) | ||||||
Compensation expense for restricted stock | 1,502 | 1,502 | ||||||
Tax related items for share based awards | (266) | (266) | ||||||
Currency translation adjustment | (718) | (718) | ||||||
Net income (loss) | 33,687 | 33,859 | (172) | |||||
Ending Balance at Sep. 30, 2019 | 342,391 | 174 | 157,426 | 203,526 | 1,234 | (19,985) | 1 | 15 |
Beginning Balance at Jun. 30, 2019 | 330,210 | 174 | 157,091 | 190,440 | 1,193 | (18,704) | 1 | 15 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (23) | (23) | ||||||
Compensation expense for restricted stock | 473 | 473 | ||||||
Tax related items for share based awards | (138) | (138) | ||||||
Currency translation adjustment | (1,281) | (1,281) | ||||||
Net income (loss) | 13,150 | 13,109 | 41 | |||||
Ending Balance at Sep. 30, 2019 | 342,391 | 174 | 157,426 | 203,526 | 1,234 | (19,985) | 1 | 15 |
Beginning Balance at Dec. 31, 2019 | 344,948 | 174 | 157,886 | 205,680 | 1,146 | (19,954) | 1 | 15 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (68) | (68) | ||||||
Compensation expense for restricted stock | 2,843 | 2,843 | ||||||
Stock compensation expense | 27 | 27 | ||||||
Tax related items for share based awards | (139) | (139) | ||||||
Issuance of shares of common stock as consideration for acquisitions | 2,001 | 1 | 2,000 | |||||
Issuance of common stock sold in public markets, net of commissions and fees | 1,142 | 1,142 | ||||||
Currency translation adjustment | (153) | 295 | (228) | (220) | ||||
Net income (loss) | (27,047) | (26,814) | (233) | |||||
Ending Balance at Sep. 30, 2020 | 323,554 | 175 | 164,054 | 178,570 | 913 | (20,174) | 1 | 15 |
Beginning Balance at Jun. 30, 2020 | 357,845 | 175 | 163,094 | 213,260 | 1,022 | (19,722) | 1 | 15 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred dividends paid | (23) | (23) | ||||||
Compensation expense for restricted stock | 983 | 983 | ||||||
Tax related items for share based awards | (23) | (23) | ||||||
Currency translation adjustment | (453) | (1) | (452) | |||||
Net income (loss) | (34,775) | (34,666) | (109) | |||||
Ending Balance at Sep. 30, 2020 | $ 323,554 | $ 175 | $ 164,054 | $ 178,570 | $ 913 | $ (20,174) | $ 1 | $ 15 |
THE COMPANY
THE COMPANY | 9 Months Ended |
Sep. 30, 2020 | |
THE COMPANY [Abstract] | |
THE COMPANY | THE COMPANY DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") was incorporated in Texas on July 26, 1996. DXP Enterprises, Inc. and its subsidiaries are engaged in the business of distributing maintenance, repair and operating ("MRO") products and service to a variety of end markets and industrial customers. Additionally, DXP provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to energy and industrial customers. The Company is organized into three business segments: Service Centers ("SC"), Supply Chain Services ("SCS") and Innovative Pumping Solutions ("IPS"). See Note 1 3 - Segment Reporting for discussion of the business segments. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES Basis of Presentation The Company's financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its variable interest entity ("VIE"). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2020. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, these condensed consolidated financial statements contain all adjustments necessary to present fairly the Company's condensed consolidated statements of operations and comprehensive income for the nine months ended September 30, 2020 and September 30, 2019, condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and September 30, 2019, and condensed consolidated statement of equity for the nine months ended September 30, 2020 and September 30, 2019. All such adjustments represent normal recurring items. All inter-company accounts and transactions have been eliminated upon consolidation. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements Intangibles-Goodwill and Other . In August 2018, the FASB issued ASU No. 2018-15, Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract based on a consensus of the FASB’s Emerging Issues Task Force (EITF) that requires implementation costs incurred by customers in cloud computing arrangements (CCAs) to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC 350-40, “Intangibles-Goodwill and Other-Internal-Use Software”. The ASU does not affect the accounting by cloud service providers, other software vendors or customers’ accounting for software licensing arrangements. The ASU requires companies to recognize deferred implementation costs to expense over the ‘term of the hosting arrangement’. Under the ASU, the term of the hosting arrangement comprises the non-cancellable period of the CCA plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which exercise of the option is controlled by the vendor. The Company adopted the standard effective January 1, 2020. The standard did not have an impact on our results of operations. Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13: Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The Company adopted the standard effective January 1, 2020. The standard did not have an impact on our results of operations. Measurement of Credit Losses on Financial Instruments . In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as later modified by ASUs 2018-19, 2019-04, 2019-05, 2019-11 and 2020-02. This ASU requires estimating all expected credit losses for certain types of financial instruments, including trade receivables and contract assets, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company adopted this ASU effective January 1, 2020 which resulted in an immaterial impact to beginning retained earnings. While the adoption of this ASU did not have a material impact on the Company's financial statements, it required changes to the Company’s process of estimating expected credit losses on trade receivables and contract assets. The Company carries its accounts receivable at their face amounts less an allowance for expected credit losses. The Company establishes an allowance for expected credit losses to present the net amount of accounts receivable expected to be collected. On a regular basis, the Company evaluates its accounts receivable and contract assets and establishes the allowance for expected credit losses based on a combination of specific customer circumstances (including slow pays and bankruptcies), as well as history of write-offs and collections, current credit conditions and micro and macro-economic forecasts. Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This update provides optional expedients and exceptions for applying generally accepted accounting principles to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating the potential impact of this ASU on the financial statements. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations. |
IMPAIRMENT AND OTHER CHARGES
IMPAIRMENT AND OTHER CHARGES | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
IMPAIRMENTS AND OTHER CHARGES | IMPAIRMENTS AND OTHER CHARGES The Company tests goodwill for impairment at least annually or more frequently whenever events or circumstances occur indicating that it might be impaired. During the third quarter of 2020, the Company’s market capitalization declined significantly driven by current macroeconomic and geopolitical conditions including the collapse of oil prices caused by both surplus production and supply as well as the decrease in demand caused by the COVID-19 pandemic. In addition, the uncertainty related to oil demand continues to have a significant impact on the investment and operating plans of a certain percentage of our customers. Based on these events, the Company concluded that it was more likely than not that the fair values of certain of its reporting units were less than their carrying values. Therefore, the Company performed an interim goodwill impairment test. For the three months ended September 30, 2020, goodwill was evaluated for impairment at the reporting unit level. The Company had four goodwill reporting units: Service Centers, Innovative Pumping Solutions, Canada and Supply Chain Services. The Company determined the fair values of two reporting units with goodwill were below their carrying values, resulting in a $36.4 million goodwill impairment, which was included in impairment charges in the consolidated statement of operations. Innovative Pumping Solutions The oil and gas industry experienced unprecedented disruption during 2020 as a result of a combination of factors, including the substantial decline in global demand for oil caused by the COVID-19 pandemic and subsequent mitigation efforts. This disruption created a substantial surplus of oil and a decline in oil prices. West Texas Intermediate (WTI) oil spot prices decreased sharply during the first quarter of 2020 from a high of $63 per barrel in early January of 2020 to approximately $21 per barrel by the end of the first quarter of 2020. Although oil prices have recovered modestly, WTI oil spot prices averaged approximately $41 per barrel during the third quarter of 2020, which is approximately 28% less than the average price per barrel during 2019. The U.S. average rig count continued to decline in the third quarter of 2020, dropping 35% compared to the second quarter of 2020. These factors, along with the continued impact of COVID-19, constituted a triggering event and required a goodwill impairment analysis for our manufacturing reporting unit. With the adverse economic impacts discussed above and the uncertainty surrounding the COVID-19 pandemic, the results of the impairment test indicated that the carrying amount of the manufacturing reporting unit exceeded the estimated fair value of the reporting unit, and a full impairment of its remaining goodwill was required. Significant assumptions inherent in the valuation methodologies for goodwill include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and the cost of capital. To evaluate the sensitivity of the fair value calculations for the reporting unit, the Company applied a hypothetical 100 bps reduction in the weighted average cost of capital, and separately, increased the revenue projections by 10 percent, holding other factors steady. Even with more favorable assumptions, the results of these sensitivity analyses led the Company to record a non-cash impairment charge of $16.0 million for goodwill during the three months ended September 30, 2020. Canada As a result of the reductions in capital spending for oil and gas producers and processors and the economic repercussions from the COVID-19 pandemic, we determined these events constituted a triggering event that required us to review the recoverability of our long-lived assets and perform an interim goodwill impairment assessment as of July 31, 2020. Our review resulted in the recording of impairments and other charges during the third quarter of 2020. As a result of our goodwill impairment assessments, we determined that the fair value of our Canadian reporting unit was lower than its net book value and, therefore, resulted in a partial goodwill impairment. The enterprise value of the Canadian reporting unit at July 31, 2020 was less than its carrying value by approximately 40 percent. This resulted in a partial goodwill impairment of $20.5 million for Canada. Per the impairment test and respective sensitivity analyses, it was noted that a decrease of approximately 480 basis points in the pre-tax discount rate and an approximately 150 basis points increase in our revenue long-term growth rate projections would cause the Canada business enterprise value to increase to the level of its carrying value and thus avoid a full impairment. Other Impairments The negative market indicators described above were triggering events that indicated that certain of the Company’s long-lived intangible and tangible assets and additional inventory items may also have been impaired. Recoverability testing indicated that certain long-lived assets and inventory were indeed impaired. The estimated fair value of these assets was determined to be below their carrying value. As a result, the Company recorded the following additional impairment and other charges as detailed in the table below (in thousands) . Three and Nine Months Ended September 30, 2020 Long-lived asset impairments $ 4,775 Goodwill impairments 36,435 Inventory and work-in-progress costs 7,191 Total impairment and other charges $ 48,401 The Company determined the fair value of both long-lived assets and goodwill primarily using the discounted cash flow method and in the case of goodwill, a multiples-based market approach for comparable companies. Given the current volatile market environment and inherent complexities it presents, the Company utilized third-party valuation advisors to assist us with these valuations. These analyses included significant judgment, including management’s short-term and long-term forecast of operating performance, discount rates based on the weighted average cost of capital, as derived from peers, revenue growth rates, profitability margins, capital expenditures, the timing of future cash flows based on an eventual recovery of the oil and gas industry, and in the case of long-lived assets, the remaining useful life and service potential of the asset, all of which were classified as Level 3 inputs under the fair value hierarchy. These impairment assessments incorporate inherent uncertainties, including supply and demand for the Company’s products and services and future market conditions, which are difficult to predict in volatile economic environments. The discount rates utilized to value the reporting units were in a range from 14.8 percent to 16.4 percent. Given the dynamic nature of the COVID-19 pandemic and related market conditions, we cannot reasonably estimate the period that these events will persist or the full extent of the impact they will have on our business. If market conditions continue to deteriorate, including crude oil prices further declining or remaining at low levels for a sustained period, we may record further asset impairments, which may include an impairment of the carrying value of our goodwill associated with other reporting units. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES The Company frequently utilizes operating leases for buildings, vehicles, machinery and equipment. For more information on lease accounting, see Note 4 - Lease to the consolidated financial statements of the Company's Annual Report on Form 10-K for the year ended December 31, 2019. Supplemental cash flow information related to leases was as follows (in thousands) : Nine Months Ended September 30, Nine Months Ended September 30, Lease 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 13,714 $ 13,941 Right-of-use assets obtained in exchange for lease liabilities Operating leases 4,986 8,889 Supplemental balance sheet information related to leases was as follows (in thousand) : Lease Classification September 30, 2020 September 30, 2019 Assets Operating Operating lease right-of-use assets $ 58,657 $ 67,296 Liabilities Current operating Short-term operating lease liabilities 16,605 17,711 Non-current operating Long-term operating lease liabilities 41,324 49,602 Total operating lease liabilities $ 57,929 $ 67,313 During the nine months ended September 30, 2020, the Company paid $2.8 million in current and future lease obligations to entities invested in by the Company’s Chief Executive Officer. |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Authoritative guidance for financial assets and liabilities measured on a recurring basis applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. Fair value, as defined in the authoritative guidance, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance affects the fair value measurement of an investment with quoted market prices in an active market for identical instruments, which must be classified in one of the following categories: Level 1 Inputs Level 1 inputs come from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs Level 2 inputs are other than quoted prices that are observable for an asset or liability. These inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. Level 3 Inputs Level 3 inputs are unobservable inputs for the asset or liability which require the Company's own assumptions. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Our acquisitions may include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent consideration include managements assumptions about the likelihood of payment based on the established benchmarks and discount rates based on an internal rate of return analysis. The fair value measurement includes inputs that are Level 3 classified as discussed above, as they are not observable in the market. Should actual results increase or decrease as compared to the assumption used in our analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Changes in the fair value of the contingent earn-out consideration are measured each reporting period and reflected in our results of operations. As of September 30, 2020, we recorded a $0.8 million liability for contingent consideration associated with the acquisition of Application Specialties Inc. ("ASI") in other current liabilities. For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the nine months ended September 30, 2020: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent Liability for Accrued Consideration (in thousands) Beginning balance at December 31, 2019 $ 2,705 Acquisitions and settlements Acquisitions — Settlements (2,000) Total remeasurement adjustments: Changes in fair value recorded in other (income) expense, net 98 *Ending Balance at September 30, 2020 $ 803 The amount of total (gains) or losses for the quarter included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at September 30, 2020. $ 98 * Included in other current liabilities Quantitative Information about Level 3 Fair Value Measurements The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: (in thousands, unaudited) Fair value at September 30, 2020 Valuation Technique Significant Unobservable Contingent consideration: $ 803 Discounted cash flow Annualized EBITDA and probability of achievement Sensitivity to Changes in Significant Unobservable Inputs As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisition of Application Specialties, Inc ("ASI") are annualized earnings before interest, tax, depreciation and amortization ("EBITDA") forecasts developed by the Company's management and the probability of achievement of those EBITDA results. The discount rate used in the calculation was 7.9 percent. With less than one year remaining on the earn-out payment schedule, changes to the discount rate would not result in a significant impact on the recorded liability. Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheet at September 30, 2020 and December 31, 2019, but which require disclosure of their fair values include: cash and cash equivalents, trade accounts receivable, trade accounts payable and accrued expenses, accrued payroll and related benefits, and the revolving line of credit. The Company believes that the estimated fair value of such instruments at September 30, 2020 and December 31, 2019 approximates their carrying value as reported on the unaudited condensed consolidated balance sheets. See Note 10 - Long Term Debt for the fair value of our term loan debt under our syndicated credit agreement facility. Nonrecurring Fair Value Measurements - In the third quarter of 2020, we incurred noncash impairment charges for goodwill and certain long-lived and other assets. The valuation of these assets required the use of significant unobservable inputs. To estimate the fair value, we used two generally accepted valuation techniques, an income approach and a market approach. Under the income approach, our discounted cash flow analysis included the following inputs that are not readily available - a discount rate, or weighted cost of capital derived from our industry peers, our estimate of future sales, operating costs and capital expenditures. Under the market approach, our inputs included EBITDA multiples, which were derived from recent peer acquisition transactions, and forward EBITDA, which incorporates the same inputs used under the income approach. The estimated fair value of assets and our reporting units are classified as Level 3. See Note 4 - Impairments and Other Charges for additional information about these impairment charges and our assumptions. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The carrying values of inventories are as follows ( in thousands ): September 30, 2020 December 31, 2019 Finished goods $ 120,492 $ 122,510 Work in process 13,056 19,721 Obsolescence reserve (14,684) (12,867) Inventories $ 118,864 $ 129,364 |
COSTS AND ESTIMATED PROFITS ON
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS | 9 Months Ended |
Sep. 30, 2020 | |
Contractors [Abstract] | |
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS | COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS Under our customized pump production contracts in our IPS segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. Our contract assets are presented as “Cost and estimated profits in excess of billings” on our condensed consolidated balance sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities that are presented as “Billings in excess of costs and estimated profits” on our condensed consolidated balance sheets. Costs and estimated profits on uncompleted contracts and related amounts billed were as follows ( in thousands ): September 30, 2020 December 31, 2019 Costs incurred on uncompleted contracts $ 52,500 $ 51,017 Estimated profits, thereon 10,107 10,771 Total 62,607 61,788 Less: billings to date 45,233 41,223 Net $ 17,374 $ 20,565 Such amounts were included in the accompanying condensed Consolidated Balance Sheets for September 30, 2020 and December 31, 2019 under the following captions ( in thousands ): September 30, 2020 December 31, 2019 Costs and estimated profits in excess of billings $ 21,544 $ 32,455 Billings in excess of costs and estimated profits (4,168) (11,871) Translation adjustment (2) (19) Net $ 17,374 $ 20,565 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate from continuing operations was 22.4 percent for the nine months ended September 30, 2020 compared to a tax expense of 24.0 percent for the nine months ended September 30, 2019. Compared to the U.S. statutory rate for the nine months ended September 30, 2019, the effective tax rate was increased by state taxes, foreign taxes and nondeductible expenses partially offset by research and development tax credits, return to provision adjustments and other tax credits. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts would be classified as a component of income tax provision (benefit) in the financial statements consistent with the Company’s policy. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The components of the Company's long-term debt consisted of the following ( in thousands ): September 30, 2020 December 31, 2019 Carrying Value (1) Fair Value Carrying Value (1) Fair Value ABL Revolver $ — $ — $ — $ — Term Loan B 217,500 212,606 244,375 244,375 Total long-term debt 217,500 212,606 244,375 244,375 Less: current portion (2,500) (2,444) (2,500) (2,500) Long-term debt less current maturities $ 215,000 $ 210,162 $ 241,875 $ 241,875 (1) Carrying value amounts do not include unamortized debt issuance costs of $5.2 million and $6.5 million for September 30, 2020 and December 31, 2019, respectively . Credit Agreements On March 17, 2020, the Company entered into an Increase Agreement (the "Increase Agreement") that provided for a $135 million asset-backed revolving line of credit (the "ABL Revolver") a $50.0 million increase above the $85.0 million original revolver. The Increase Agreement amends and supplements that certain Loan and Security Agreement, dated as of August 29, 2017. As of September 30, 2020, the Company had no amount outstanding under the ABL Revolver and had $114.3 million of borrowing capacity, net of the impact of outstanding letters of credit. The fair value measurements used by the Company are considered Level 2 inputs, as defined in the fair value hierarchy. The fair value estimates were based on quoted prices for identical or similar securities. The Company was in compliance with all financial covenants under the ABL Revolver and Term Loan B Agreements as of September 30, 2020. |
EARNINGS PER SHARE DATA
EARNINGS PER SHARE DATA | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE DATA | EARNINGS PER SHARE DATA Basic earnings per share is computed based on weighted average shares outstanding and excludes dilutive securities. Diluted earnings per share is computed including the impacts of all potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data ): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic: Weighted average shares outstanding 17,790 17,602 17,743 17,588 Net income (loss) attributable to DXP Enterprises, Inc. $ (34,666) $ 13,109 $ (26,814) $ 33,859 Convertible preferred stock dividend 23 23 68 68 Net income (loss) attributable to common shareholders $ (34,689) $ 13,086 $ (26,882) $ 33,791 Per share amount $ (1.95) $ 0.74 $ (1.52) $ 1.92 Diluted: Weighted average shares outstanding 17,790 17,602 17,743 17,588 Assumed conversion of convertible preferred stock — 840 — 840 Total dilutive shares 17,790 18,442 17,743 18,428 Net income (loss) attributable to common shareholders $ (34,689) $ 13,086 $ (26,882) $ 33,791 Convertible preferred stock dividend — 23 — 68 Net income (loss) attributable to DXP Enterprises, Inc. $ (34,689) $ 13,109 $ (26,882) $ 33,859 Per share amount $ (1.95) $ 0.71 $ (1.52) $ 1.84 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESFrom time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. While DXP is unable to predict the outcome of these lawsuits, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on DXP's consolidated financial position, cash flows, or results of operations. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company's reportable business segments are: Service Centers, Innovative Pumping Solutions and Supply Chain Services. The Service Centers segment is engaged in providing maintenance, MRO products, equipment and integrated services, including logistics capabilities, to industrial customers. The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, industrial supply, safety products and safety services categories. The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, re-manufactures 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 inter-segment eliminations. The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ): Three Months Ended September 30, 2020 2019 SC IPS SCS Total SC IPS SCS Total Product sales 1 $ 143,767 $ — $ 29,360 $ 173,127 $ 178,841 $ — $ 46,998 $ 225,839 Inventory services 2 — — 4,057 $ 4,057 — — 4,284 $ 4,284 Staffing services 3 21,133 — — $ 21,133 14,886 — — $ 14,886 Pump production 4 — 21,876 — $ 21,876 — 82,169 — $ 82,169 Total Revenue $ 164,900 $ 21,876 $ 33,417 $ 220,193 $ 193,727 $ 82,169 $ 51,282 $ 327,178 Income (loss) from operations 5 $ 22,151 $ (2,913) $ 2,900 $ 22,138 $ 25,071 $ 10,097 $ 3,110 $ 38,278 Nine Months Ended September 30, 2020 2019 SC IPS SCS Total SC IPS SCS Total Product sales 1 $ 457,848 $ — $ 106,500 $ 564,348 $ 534,953 $ — $ 141,768 $ 676,721 Inventory services 2 — — 12,368 $ 12,368 — — 12,149 $ 12,149 Staffing services 3 43,485 — — $ 43,485 44,931 — — $ 44,931 Pump production 4 — 152,376 — $ 152,376 — 237,920 — $ 237,920 Total Revenue $ 501,333 $ 152,376 $ 118,868 $ 772,577 $ 579,884 $ 237,920 $ 153,917 $ 971,721 Income from operations 5 $ 52,742 $ 16,080 $ 10,008 $ 78,830 $ 67,281 $ 28,924 $ 10,980 $ 107,185 1 Product sales that are recognized at a point in time. 2 Inventory management services that are recognized over the contract life. 3 Staffing services that are invoiced on a day-rate basis. 4 Custom pump production that is recognized over time. 5 Excludes impairment expense and other charges of $26.2 million for IPS and $22.2 million for Service Centers. The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating income for reportable segments $ 22,138 $ 38,278 $ 78,830 $ 107,185 Adjustment for: Amortization of intangible assets 3,053 3,806 9,296 11,423 Impairment and other charges 48,401 — 48,401 — Corporate expenses 11,530 12,755 44,311 36,382 Income (loss) from operations $ (40,846) $ 21,717 (23,178) 59,380 Interest expense 3,752 4,986 12,059 14,911 Other (income) expense, net 320 (25) (381) 127 Income (loss) before income taxes $ (44,918) $ 16,756 $ (34,856) $ 44,342 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS On February 1, 2020, the Company completed the acquisition of substantially all of the assets of Turbo Machinery Repair (“Turbo”), a pump and industrial equipment repair, maintenance, machining and labor services company. The Company paid approximately $3.2 million in cash. For the nine months ended September 30, 2020, Turbo contributed sales of $1.9 million. On January 1, 2020, the Company completed the acquisition of Pumping Systems, Inc. (“PSI”), a distributor of pumps, systems and related services. The PSI acquisition was funded with a mixture of cash on hand as well as issuing DXP's common stock. The Company paid approximately $13.0 million in cash and stock. For the nine months ended September 30, 2020, PSI contributed sales of $12.9 million. Purchase Price Consideration Total Consideration (Dollars in millions) Cash payments $ 14.2 Fair value of stock issued 2.0 Total purchase price consideration $ 16.2 |
SALES OF COMMON STOCK
SALES OF COMMON STOCK | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
SALES OF COMMON STOCK | SALES OF COMMON STOCKOn May 11, 2020, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with BMO Capital Markets Corp. (the “Distribution Agent”) pursuant to which the Company may offer and sell shares of the Company’s common stock, par value $0.01 per share, having an aggregate offering amount of up to $37,500,000 from time to time through the Distribution Agent. Sales, if any, of the Company’s common stock pursuant to the Equity Distribution Agreement will be made in “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. During the nine months ended September 30, 2020, the Company issued and sold 46,000 shares of common stock under the Equity Distribution Agreement, with net proceeds totaling approximately $1.1 million, after deducting the Distribution Agent’s commission of approximately $26 thousand. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company's financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its variable interest entity ("VIE"). The accompanying unaudited condensed consolidated financial statements have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019. For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2020. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, these condensed consolidated financial statements contain all adjustments necessary to present fairly the Company's condensed consolidated statements of operations and comprehensive income for the nine months ended September 30, 2020 and September 30, 2019, condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and September 30, 2019, and condensed consolidated statement of equity for the nine months ended September 30, 2020 and September 30, 2019. All such adjustments represent normal recurring items. |
Consolidation | All inter-company accounts and transactions have been eliminated upon consolidation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Intangibles-Goodwill and Other . In August 2018, the FASB issued ASU No. 2018-15, Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract based on a consensus of the FASB’s Emerging Issues Task Force (EITF) that requires implementation costs incurred by customers in cloud computing arrangements (CCAs) to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC 350-40, “Intangibles-Goodwill and Other-Internal-Use Software”. The ASU does not affect the accounting by cloud service providers, other software vendors or customers’ accounting for software licensing arrangements. The ASU requires companies to recognize deferred implementation costs to expense over the ‘term of the hosting arrangement’. Under the ASU, the term of the hosting arrangement comprises the non-cancellable period of the CCA plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which exercise of the option is controlled by the vendor. The Company adopted the standard effective January 1, 2020. The standard did not have an impact on our results of operations. Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13: Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The Company adopted the standard effective January 1, 2020. The standard did not have an impact on our results of operations. Measurement of Credit Losses on Financial Instruments . In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as later modified by ASUs 2018-19, 2019-04, 2019-05, 2019-11 and 2020-02. This ASU requires estimating all expected credit losses for certain types of financial instruments, including trade receivables and contract assets, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company adopted this ASU effective January 1, 2020 which resulted in an immaterial impact to beginning retained earnings. While the adoption of this ASU did not have a material impact on the Company's financial statements, it required changes to the Company’s process of estimating expected credit losses on trade receivables and contract assets. The Company carries its accounts receivable at their face amounts less an allowance for expected credit losses. The Company establishes an allowance for expected credit losses to present the net amount of accounts receivable expected to be collected. On a regular basis, the Company evaluates its accounts receivable and contract assets and establishes the allowance for expected credit losses based on a combination of specific customer circumstances (including slow pays and bankruptcies), as well as history of write-offs and collections, current credit conditions and micro and macro-economic forecasts. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This update provides optional expedients and exceptions for applying generally accepted accounting principles to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating the potential impact of this ASU on the financial statements. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations. |
Fair Value of Financial Assets and Liabilities | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Authoritative guidance for financial assets and liabilities measured on a recurring basis applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. Fair value, as defined in the authoritative guidance, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance affects the fair value measurement of an investment with quoted market prices in an active market for identical instruments, which must be classified in one of the following categories: Level 1 Inputs Level 1 inputs come from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs Level 2 inputs are other than quoted prices that are observable for an asset or liability. These inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. Level 3 Inputs Level 3 inputs are unobservable inputs for the asset or liability which require the Company's own assumptions. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. |
IMPAIRMENTS AND OTHER CHARGES (
IMPAIRMENTS AND OTHER CHARGES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Impairments and Other Charges | The negative market indicators described above were triggering events that indicated that certain of the Company’s long-lived intangible and tangible assets and additional inventory items may also have been impaired. Recoverability testing indicated that certain long-lived assets and inventory were indeed impaired. The estimated fair value of these assets was determined to be below their carrying value. As a result, the Company recorded the following additional impairment and other charges as detailed in the table below (in thousands) . Three and Nine Months Ended September 30, 2020 Long-lived asset impairments $ 4,775 Goodwill impairments 36,435 Inventory and work-in-progress costs 7,191 Total impairment and other charges $ 48,401 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows (in thousands) : Nine Months Ended September 30, Nine Months Ended September 30, Lease 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 13,714 $ 13,941 Right-of-use assets obtained in exchange for lease liabilities Operating leases 4,986 8,889 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows (in thousand) : Lease Classification September 30, 2020 September 30, 2019 Assets Operating Operating lease right-of-use assets $ 58,657 $ 67,296 Liabilities Current operating Short-term operating lease liabilities 16,605 17,711 Non-current operating Long-term operating lease liabilities 41,324 49,602 Total operating lease liabilities $ 57,929 $ 67,313 |
FAIR VALUE OF FINANCIAL ASSET_2
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Reconciliation of the Beginning and Ending Balance and Gains or Losses Recognized | For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the nine months ended September 30, 2020: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent Liability for Accrued Consideration (in thousands) Beginning balance at December 31, 2019 $ 2,705 Acquisitions and settlements Acquisitions — Settlements (2,000) Total remeasurement adjustments: Changes in fair value recorded in other (income) expense, net 98 *Ending Balance at September 30, 2020 $ 803 The amount of total (gains) or losses for the quarter included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at September 30, 2020. $ 98 * Included in other current liabilities |
Schedule of Quantitative Information About Level 3 Fair Value Measurements | The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: (in thousands, unaudited) Fair value at September 30, 2020 Valuation Technique Significant Unobservable Contingent consideration: $ 803 Discounted cash flow Annualized EBITDA and probability of achievement |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Carrying Values of Inventories | The carrying values of inventories are as follows ( in thousands ): September 30, 2020 December 31, 2019 Finished goods $ 120,492 $ 122,510 Work in process 13,056 19,721 Obsolescence reserve (14,684) (12,867) Inventories $ 118,864 $ 129,364 |
COSTS AND ESTIMATED PROFITS O_2
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Contractors [Abstract] | |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets | Costs and estimated profits on uncompleted contracts and related amounts billed were as follows ( in thousands ): September 30, 2020 December 31, 2019 Costs incurred on uncompleted contracts $ 52,500 $ 51,017 Estimated profits, thereon 10,107 10,771 Total 62,607 61,788 Less: billings to date 45,233 41,223 Net $ 17,374 $ 20,565 Such amounts were included in the accompanying condensed Consolidated Balance Sheets for September 30, 2020 and December 31, 2019 under the following captions ( in thousands ): September 30, 2020 December 31, 2019 Costs and estimated profits in excess of billings $ 21,544 $ 32,455 Billings in excess of costs and estimated profits (4,168) (11,871) Translation adjustment (2) (19) Net $ 17,374 $ 20,565 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Company's Long-term Debt | The components of the Company's long-term debt consisted of the following ( in thousands ): September 30, 2020 December 31, 2019 Carrying Value (1) Fair Value Carrying Value (1) Fair Value ABL Revolver $ — $ — $ — $ — Term Loan B 217,500 212,606 244,375 244,375 Total long-term debt 217,500 212,606 244,375 244,375 Less: current portion (2,500) (2,444) (2,500) (2,500) Long-term debt less current maturities $ 215,000 $ 210,162 $ 241,875 $ 241,875 (1) Carrying value amounts do not include unamortized debt issuance costs of $5.2 million and $6.5 million for September 30, 2020 and December 31, 2019, respectively . |
EARNINGS PER SHARE DATA (Tables
EARNINGS PER SHARE DATA (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share for the periods indicated ( in thousands, except per share data ): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic: Weighted average shares outstanding 17,790 17,602 17,743 17,588 Net income (loss) attributable to DXP Enterprises, Inc. $ (34,666) $ 13,109 $ (26,814) $ 33,859 Convertible preferred stock dividend 23 23 68 68 Net income (loss) attributable to common shareholders $ (34,689) $ 13,086 $ (26,882) $ 33,791 Per share amount $ (1.95) $ 0.74 $ (1.52) $ 1.92 Diluted: Weighted average shares outstanding 17,790 17,602 17,743 17,588 Assumed conversion of convertible preferred stock — 840 — 840 Total dilutive shares 17,790 18,442 17,743 18,428 Net income (loss) attributable to common shareholders $ (34,689) $ 13,086 $ (26,882) $ 33,791 Convertible preferred stock dividend — 23 — 68 Net income (loss) attributable to DXP Enterprises, Inc. $ (34,689) $ 13,109 $ (26,882) $ 33,859 Per share amount $ (1.95) $ 0.71 $ (1.52) $ 1.84 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information Regarding Company's Segments | The following table sets out financial information related to the Company's segments excluding amortization ( in thousands ): Three Months Ended September 30, 2020 2019 SC IPS SCS Total SC IPS SCS Total Product sales 1 $ 143,767 $ — $ 29,360 $ 173,127 $ 178,841 $ — $ 46,998 $ 225,839 Inventory services 2 — — 4,057 $ 4,057 — — 4,284 $ 4,284 Staffing services 3 21,133 — — $ 21,133 14,886 — — $ 14,886 Pump production 4 — 21,876 — $ 21,876 — 82,169 — $ 82,169 Total Revenue $ 164,900 $ 21,876 $ 33,417 $ 220,193 $ 193,727 $ 82,169 $ 51,282 $ 327,178 Income (loss) from operations 5 $ 22,151 $ (2,913) $ 2,900 $ 22,138 $ 25,071 $ 10,097 $ 3,110 $ 38,278 Nine Months Ended September 30, 2020 2019 SC IPS SCS Total SC IPS SCS Total Product sales 1 $ 457,848 $ — $ 106,500 $ 564,348 $ 534,953 $ — $ 141,768 $ 676,721 Inventory services 2 — — 12,368 $ 12,368 — — 12,149 $ 12,149 Staffing services 3 43,485 — — $ 43,485 44,931 — — $ 44,931 Pump production 4 — 152,376 — $ 152,376 — 237,920 — $ 237,920 Total Revenue $ 501,333 $ 152,376 $ 118,868 $ 772,577 $ 579,884 $ 237,920 $ 153,917 $ 971,721 Income from operations 5 $ 52,742 $ 16,080 $ 10,008 $ 78,830 $ 67,281 $ 28,924 $ 10,980 $ 107,185 1 Product sales that are recognized at a point in time. 2 Inventory management services that are recognized over the contract life. 3 Staffing services that are invoiced on a day-rate basis. 4 Custom pump production that is recognized over time. 5 Excludes impairment expense and other charges of $26.2 million for IPS and $22.2 million for Service Centers. |
Schedule of Reconciliation of Operating Income for Reportable Segments to Consolidated Income Before Taxes | The following table presents reconciliations of operating income for reportable segments to the consolidated income before taxes ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating income for reportable segments $ 22,138 $ 38,278 $ 78,830 $ 107,185 Adjustment for: Amortization of intangible assets 3,053 3,806 9,296 11,423 Impairment and other charges 48,401 — 48,401 — Corporate expenses 11,530 12,755 44,311 36,382 Income (loss) from operations $ (40,846) $ 21,717 (23,178) 59,380 Interest expense 3,752 4,986 12,059 14,911 Other (income) expense, net 320 (25) (381) 127 Income (loss) before income taxes $ (44,918) $ 16,756 $ (34,856) $ 44,342 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Acquisition Consideration | Purchase Price Consideration Total Consideration (Dollars in millions) Cash payments $ 14.2 Fair value of stock issued 2.0 Total purchase price consideration $ 16.2 |
THE COMPANY (Details)
THE COMPANY (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
THE COMPANY [Abstract] | |
Number of business segments | 3 |
IMPAIRMENTS AND OTHER CHARGES -
IMPAIRMENTS AND OTHER CHARGES - Narrative (Details) $ in Thousands | Jul. 31, 2020USD ($) | Mar. 31, 2020$ / bbl | Jan. 01, 2020$ / bbl | Sep. 30, 2020USD ($)reporting_unit$ / bbl | Jun. 30, 2020 | Sep. 30, 2020USD ($)reporting_unit |
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Number of reporting units | reporting_unit | 4 | |||||
Number of reporting units with goodwill below their carrying values | reporting_unit | 2 | 2 | ||||
Goodwill impairment | $ 36,435 | $ 36,435 | ||||
COVID-19 | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Goodwill impairment | 36,400 | |||||
COVID-19 | Discount Rate | Minimum | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Reporting unit, measurement input | 0.148 | |||||
COVID-19 | Discount Rate | Maximum | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Reporting unit, measurement input | 0.164 | |||||
COVID-19 | Innovative Pumping Solutions | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Goodwill impairment | $ 16,000 | |||||
Oil spot price (in dollars per barrel) | $ / bbl | 21 | 63 | 41 | |||
Percentage decrease in average oil price per barrel | 0.28 | 0.35 | ||||
Reduction in weighted average costs of capital | 0.0100 | |||||
Increase in revenue long-term growth rate projections | 0.10 | |||||
COVID-19 | Canada | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||
Goodwill impairment | $ 20,500 | |||||
Increase in revenue long-term growth rate projections | 0.0150 | |||||
Percentage of fair value less than carrying amount of reporting unit | 40.00% | |||||
Decrease in pre-tax discount rate | 0.0480 |
IMPAIRMENTS AND OTHER CHARGES_2
IMPAIRMENTS AND OTHER CHARGES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disclosure Text Block Supplement [Abstract] | ||||
Long-lived asset impairments | $ 4,775 | $ 4,775 | ||
Goodwill impairments | 36,435 | 36,435 | ||
Inventory Write-down | 7,191 | 7,191 | ||
Impairment and other charges | $ 48,401 | $ 0 | $ 48,401 | $ 0 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 13,714 | $ 13,941 |
Right-of-use assets obtained in exchange for lease liabilities | ||
Right-of-use assets obtained in exchange for lease liabilities | $ 4,986 | $ 8,889 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Assets | |||
Operating lease right-of-use assets | $ 58,657 | $ 66,191 | $ 67,296 |
Liabilities | |||
Short-term operating lease liabilities | 16,605 | 17,603 | 17,711 |
Long-term operating lease liabilities | 41,324 | $ 48,605 | 49,602 |
Total operating lease liabilities | $ 57,929 | $ 67,313 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Chief Executive Officer | |
Lessee, Lease, Description [Line Items] | |
Operating lease expense | $ 2.8 |
FAIR VALUE OF FINANCIAL ASSET_3
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Narrative (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Discounted cash flow | Fair Value, Inputs, Level 3 | Annualized EBITDA and probability of achievement | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liability for contingent consideration | $ 803 |
Discount rate | 0.079 |
ASI | Other Current and Long-term Liabilities | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liability for contingent consideration | $ 800 |
FAIR VALUE OF FINANCIAL ASSET_4
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Reconciliation of Beginning and Ending Balances (Details) - Fair Value, Measurements, Recurring - Fair Value, Inputs, Level 3 - Contingent Consideration Liability $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Contingent Liability for Accrued Consideration | |
Beginning balance at December 31, 2019 | $ 2,705 |
Acquisitions and settlements | |
Acquisitions | 0 |
Settlements | (2,000) |
Total remeasurement adjustments: | |
Changes in fair value recorded in other (income) expense, net | 98 |
Ending Balance at September 30, 2020 | 803 |
The amount of total (gains) or losses for the quarter included in earnings or changes to net assets, attributable to changes in unrealized losses relating to liabilities still held at September 30, 2020. | $ 98 |
FAIR VALUE OF FINANCIAL ASSET_5
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES - Quantitative Information About Level 3 (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Fair Value, Inputs, Level 3 | Discounted cash flow | Annualized EBITDA and probability of achievement | |
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |
Contingent consideration: (ASI acquisition) | $ 803 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 120,492 | $ 122,510 |
Work in process | 13,056 | 19,721 |
Obsolescence reserve | (14,684) | (12,867) |
Inventories | $ 118,864 | $ 129,364 |
COSTS AND ESTIMATED PROFITS O_3
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Schedule of costs and estimated earnings on uncompleted contracts [Abstract] | ||
Costs incurred on uncompleted contracts | $ 52,500 | $ 51,017 |
Estimated profits, thereon | 10,107 | 10,771 |
Total | 62,607 | 61,788 |
Less: billings to date | 45,233 | 41,223 |
Net | 17,374 | 20,565 |
Schedule of Costs and Estimated Earnings on Uncompleted Contracts Included in Condensed Consolidated Balance Sheets [Abstract] | ||
Costs and estimated profits in excess of billings | 21,544 | 32,455 |
Billings in excess of costs and estimated profits | (4,168) | (11,871) |
Translation adjustment | (2) | (19) |
Net | 17,374 | $ 20,565 |
Balances previously classified as contract liabilities at the beginning of the period that have shipped | $ 11,700 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate from continuing operations | 22.40% | 24.00% |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Borrowings [Abstract] | ||
Less: current portion | $ (2,500) | $ (2,500) |
Long-term debt less current maturities | 209,813 | 235,419 |
Unamortized debt issuance costs | 5,200 | 6,500 |
Carrying Value | ||
Borrowings [Abstract] | ||
Total long-term debt | 217,500 | 244,375 |
Less: current portion | (2,500) | (2,500) |
Long-term debt less current maturities | 215,000 | 241,875 |
Fair Value | Level 2 Inputs | ||
Borrowings [Abstract] | ||
Total long-term debt | 212,606 | 244,375 |
Less: current portion | (2,444) | (2,500) |
Long-term debt less current maturities | 210,162 | 241,875 |
ABL Revolver | Carrying Value | ||
Borrowings [Abstract] | ||
Total long-term debt | 0 | 0 |
ABL Revolver | Fair Value | Level 2 Inputs | ||
Borrowings [Abstract] | ||
Total long-term debt | 0 | 0 |
Term Loan B | Carrying Value | ||
Borrowings [Abstract] | ||
Total long-term debt | 217,500 | 244,375 |
Term Loan B | Fair Value | Level 2 Inputs | ||
Borrowings [Abstract] | ||
Total long-term debt | $ 212,606 | $ 244,375 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - Asset-backed Revolving Line of Credit - ABL Revolver - USD ($) | Mar. 17, 2020 | Sep. 30, 2020 | Aug. 29, 2017 |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity under credit agreement | $ 135,000,000 | $ 85,000,000 | |
Increase in borrowing capacity under credit agreement | $ 50,000,000 | ||
Amount outstanding under credit facility | $ 0 | ||
Borrowing capacity, including impact of letter of credit | $ 114,300,000 |
EARNINGS PER SHARE DATA (Detail
EARNINGS PER SHARE DATA (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |||
Basic: | ||||||
Weighted average shares outstanding (in shares) | 17,790 | 17,602 | 17,743 | 17,588 | ||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (34,666) | $ 13,109 | $ (26,814) | $ 33,859 | ||
Convertible preferred stock dividend | 23 | 23 | 68 | 68 | ||
Net income (loss) attributable to common shareholders | $ (34,689) | $ 13,086 | $ (26,882) | $ 33,791 | ||
Per share amount (in dollars per share) | $ (1.95) | $ 0.74 | $ (1.52) | $ 1.92 | ||
Diluted: | ||||||
Weighted average shares outstanding (in shares) | 17,790 | 17,602 | 17,743 | 17,588 | ||
Assumed conversion of convertible preferred stock (in shares) | 0 | 840 | 0 | 840 | ||
Total dilutive shares (in shares) | 17,790 | [1] | 18,442 | 17,743 | [1] | 18,428 |
Net income (loss) attributable to common shareholders | $ (34,689) | $ 13,086 | $ (26,882) | $ 33,791 | ||
Convertible preferred stock dividend | 0 | 23 | 0 | 68 | ||
Net income (loss) attributable to DXP Enterprises, Inc. | $ (34,689) | $ 13,109 | $ (26,882) | $ 33,859 | ||
Per share amount (in dollars per share) | $ (1.95) | [1] | $ 0.71 | $ (1.52) | [1] | $ 1.84 |
Antidilutive convertible preferred securities excluded from diluted earnings per share calculation (in shares) | 840 | 840 | ||||
[1] |
SEGMENT REPORTING - Financial I
SEGMENT REPORTING - Financial Information of Company's Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | $ 220,193 | $ 327,178 | $ 772,577 | $ 971,721 |
Income (loss) from operations | 22,138 | 38,278 | 78,830 | 107,185 |
Impairment expense and other charges | 48,401 | 0 | 48,401 | 0 |
Product Sales | Recognized at a point in time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 173,127 | 225,839 | 564,348 | 676,721 |
Inventory Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 4,057 | 4,284 | 12,368 | 12,149 |
Staffing Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 21,133 | 14,886 | 43,485 | 44,931 |
Pump Production | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 21,876 | 82,169 | 152,376 | 237,920 |
SC | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 164,900 | 193,727 | 501,333 | 579,884 |
Income (loss) from operations | 22,151 | 25,071 | 52,742 | 67,281 |
Impairment expense and other charges | 22,200 | 22,200 | ||
SC | Product Sales | Recognized at a point in time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 143,767 | 178,841 | 457,848 | 534,953 |
SC | Inventory Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 0 | 0 | 0 | 0 |
SC | Staffing Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 21,133 | 14,886 | 43,485 | 44,931 |
SC | Pump Production | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 0 | 0 | 0 | 0 |
IPS | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 21,876 | 82,169 | 152,376 | 237,920 |
Income (loss) from operations | (2,913) | 10,097 | 16,080 | 28,924 |
Impairment expense and other charges | 26,200 | 26,200 | ||
IPS | Product Sales | Recognized at a point in time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 0 | 0 | 0 | 0 |
IPS | Inventory Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 0 | 0 | 0 | 0 |
IPS | Staffing Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 0 | 0 | 0 | 0 |
IPS | Pump Production | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 21,876 | 82,169 | 152,376 | 237,920 |
SCS | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 33,417 | 51,282 | 118,868 | 153,917 |
Income (loss) from operations | 2,900 | 3,110 | 10,008 | 10,980 |
SCS | Product Sales | Recognized at a point in time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 29,360 | 46,998 | 106,500 | 141,768 |
SCS | Inventory Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 4,057 | 4,284 | 12,368 | 12,149 |
SCS | Staffing Services | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | 0 | 0 | 0 | 0 |
SCS | Pump Production | Recognized over time | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Total Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Operating Income to Consolidated Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Adjustment for: | ||||
Amortization of intangible assets | $ 9,296 | $ 11,423 | ||
Impairment and other charges | $ 48,401 | $ 0 | 48,401 | 0 |
Income (loss) from operations | (40,846) | 21,717 | (23,178) | 59,380 |
Interest expense | 3,752 | 4,986 | 12,059 | 14,911 |
Other (income) expense, net | 320 | (25) | (381) | 127 |
Income (loss) before income taxes | (44,918) | 16,756 | (34,856) | 44,342 |
Operating Segments | ||||
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||||
Operating income for reportable segments | 22,138 | 38,278 | 78,830 | 107,185 |
Segment Reconciling Items | ||||
Adjustment for: | ||||
Amortization of intangible assets | 3,053 | 3,806 | 9,296 | 11,423 |
Impairment and other charges | 48,401 | 0 | 48,401 | 0 |
Corporate | ||||
Adjustment for: | ||||
Corporate expenses | $ 11,530 | $ 12,755 | $ 44,311 | $ 36,382 |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) - USD ($) $ in Millions | Feb. 01, 2020 | Jan. 01, 2020 | Feb. 01, 2020 | Sep. 30, 2020 |
Business Acquisition [Line Items] | ||||
Cash payments | $ 14.2 | |||
Turbo | ||||
Business Acquisition [Line Items] | ||||
Cash payments | $ 3.2 | |||
Sales contributed by acquiree during the period | $ 1.9 | |||
PSI | ||||
Business Acquisition [Line Items] | ||||
Cash payments | $ 13 | |||
Sales contributed by acquiree during the period | $ 12.9 |
BUSINESS ACQUISITIONS - Purchas
BUSINESS ACQUISITIONS - Purchase Price Consideration (Details) $ in Millions | 1 Months Ended |
Feb. 01, 2020USD ($) | |
Business Combinations [Abstract] | |
Cash payments | $ 14.2 |
Fair value of stock issued | 2 |
Total purchase price consideration | $ 16.2 |
SALES OF COMMON STOCK (Details)
SALES OF COMMON STOCK (Details) - USD ($) | May 11, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Equity Distribution Agreement | Distribution Agent | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Equity Distribution Agreement | Distribution Agent | Common stock | |||
Class of Stock [Line Items] | |||
Aggregate offering amount (up to) | $ 37,500,000 | ||
Number of shares of common stock issued and sold (in shares) | 46,000 | ||
Net proceeds on sale of common stock | $ 1,100,000 | ||
Distribution agent's commissions on sale of common stock | $ 26,000 |