Company: DXPE
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001020710-25-000036
Chunk: 24

Company: DXP ENTERPRISES INC
Filing Date: 2025-03-10
Form: 10-K
Item: Item 7A
Chunk 24
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 the proceeds from certain asset sales, certain debt issuances, and certain insurance proceeds. In addition, on an annual basis, we are required to repay an amount equal to 50% of excess cash flow, as defined in the Amended Senior Secured Term Loan B, reducing to 25% if our Total Leverage Ratio is less than or equal to 3.00 to 1.00. No payment of excess cash flow is required if the Total Leverage Ratio is less than or equal to 2.50 to 1.00. In connection with the Term Loan Amendment the Company expensed third-party fees of $1.1 million and recognized a $0.5 million loss on debt extinguishment, which were included in Interest expense during 2024. Deferred financing costs associated with the Term Loan Amendment were $2.3 million which were amortized to interest expense using the interest method during 2024.

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Restrictive CovenantsThe Company’s primary financial covenant under the Term Loan B is a Secured Leverage Ratio, The Term Loan B Agreement requires that the Company’s Secured Leverage Ratio, defined as the ratio, as of the last day of any fiscal quarter of consolidated secured debt (net of unrestricted cash, not to exceed $200 million) as of such day to EBITDA, beginning with the fiscal quarter ending December 31, 2024, is either equal to or less than as indicated in the table below:Fiscal QuarterSecured Leverage RatioDecember 31, 20245.75:1.00March 31, 20255.75:1.00June 30, 20255.50:1.00September 30, 20255.50:1.00December 31, 20255.50:1.00March 31, 20265.25:1.00June 30, 20265.25:1.00September 30, 20265.25:1.00December 31, 20265.00:1.00March 31, 20275.00:1.00June 30, 2027 and thereafter4.75:1.00As of December 31, 2024, the Company’s Secured Leverage Ratio was 2.43 to 1.00.The Term Loan contains restrictive covenants (in each case, subject to exclusions) that limit, among other things, the ability of the