Company: DXPE
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001020710-25-000036
Chunk: 120

Company: DXP ENTERPRISES INC
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 120
---
ITEM 1A.  Risk Factors

We are subject to various risks and uncertainties in the course of our business. Investing in the Company involves risk. In deciding whether to invest in the Company, you should carefully consider the risk factors below as well as those matters referenced in the foregoing pages under “Disclosure Regarding Forward-Looking Statements” and other information included and incorporated by reference into this Report and other reports and materials filed by us with the Securities and Exchange Commission. Any of these risk factors could have a significant or material adverse effect on our businesses, results of operations, financial condition or liquidity. They could also cause significant fluctuations and volatility in the trading price of our securities. Readers should not consider any descriptions of these factors to be a complete set of all potential risks that could affect the Company. Further, many of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence of certain of them may in turn cause the emergence or exacerbate the effects of others. Such a combination could materially increase the severity of the impact of these risks on our results of operations, liquidity and financial condition.

16

Table of Contents

We face a variety of risks that are substantial and inherent in our businesses. The following is a summary of some of the more important factors that could affect our businesses:

 Business and Operations

•Demand for our products could decrease if manufacturers decide to sell them direct.

•Changes in our customer or product mix, could cause our gross margins to fluctuate.

•Material changes in the costs of our products from manufacturers without the ability to pass price increases onto our customers could cause our gross margins to decline.

•A variety of issues could affect the timing or profitability of our projects, and could result in, among other things, project termination or payment of liquidated damages.

•Changes in estimates related to revenues and costs under customer contracts could result in a reduction or elimination of revenues or profits and the recognition of losses.

•Our manufacturers may cancel our oral or written distribution authorizations upon little or no notice, which could adversely impact our revenues and profits from distributing certain manufacturer’s products.

•We may experience unexpected supply shortages, which could adversely affect our product and service offerings and our business.

•Price reductions by our manufacturers of products that we sell could cause the value of our inventory to decline.

•We are subject to increased shipping costs as well as the potential inability of our third-party transportation providers to deliver products on a timely basis.

•Our business has substantial competition that could adversely affect our results.

•The loss of