DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that it entered into a $50 million Increase Agreement (the “Increase Agreement”), by and among DXP Enterprises, Inc. (the “Company”), certain of the Company’s US subsidiaries, as borrowers, certain of the Company’s Canadian subsidiaries, as borrowers, the incremental lenders party thereto and Bank of America, N.A., as agent.
After giving effect to the Increase Agreement, DXP will have $135 million of undrawn capacity available. There were no other amendments to the underlying ABL Credit Agreement.
David R. Little, Chairman and CEO, commented, “We are pleased that we were able to increase the ABL commitments by $50 million. The expanded credit facility gives us additional liquidity as we navigate the current environment. As we discussed on our Q4 conference call, we expect cash flow generation with negligible capital expenditures in fiscal 2020. With this up-sized ABL, we have positioned ourselves to take advantage of the market when appropriate.”
Kent Yee, CFO, commented, “We are pleased to have received this amendment and we appreciate the support by our agent. This further enhances our liquidity. As of December 31, 2019, we had $54.3 million in cash on the balance sheet and along with that we now have $135 million in availability under our ABL that matures in 2022. Our senior leverage was 2.2:1 with an outside covenant at the end of Q1 of 4.75:1. While today's environment will continue to evolve, we are comfortable with our capital structure."
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission.
Senior Vice President, CFO