Company: DXPE
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001020710-25-000036
Chunk: 0

Company: DXP ENTERPRISES INC
Filing Date: 2025-03-10
Form: 10-K
Item: Item 7A
Chunk 0
---
ITEM 7A.  Quantitative and Qualitative Disclosures about Market Risk

Our market risk results primarily from volatility in interest rates and fluctuations in the Canadian dollar. 

Interest Rate Risk

We are exposed to risk resulting from changes in interest rates as a result of our issuance of variable rate debt. To reduce our interest rate risk we may enter into financial derivative instruments, including, but not limited to, interest rate swaps and rate lock agreements to manage and mitigate our exposure. As of December 31, 2024, we had no interest rate hedges in place. Based on a sensitivity analysis as of December 31, 2024, it was estimated that if short-term interest rates average 100 basis points higher (lower) in 2024 than in 2023, interest expense, would fluctuate by $6.5 million before tax. Comparatively, based on a sensitivity analysis as of December 31, 2023, had short-term interest rates averaged 100 basis points higher (lower) in 2023 than in 2022, it was estimated that interest expense would have fluctuated by approximately $5.5 million. These amounts were estimated by considering the effect of the hypothetical interest rates on variable-rate debt outstanding each year.

Foreign Currency Risk

We are exposed to foreign currency risk from our Canadian operations. To mitigate risks associated with foreign currency fluctuations, contracts may be denominated in or indexed to the U.S. dollar and/or local inflation rates, or investments may be naturally hedged through debt and other liabilities denominated or issued in the foreign currency. To monitor our currency exchange rate risks, we use sensitivity analysis, which measures the effect of devaluation of the Canadian dollar.

Also see “Risk Factors,” included in Item 1A of this Report for additional risk factors associated with our business.

44

Table of Contents

ITEM 8.  Financial Statements and Supplementary Data

TABLE OF CONTENTS PageReport of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP) PCAOB ID: 23845Consolidated Statements of Operations and Comprehensive Income49Consolidated Balance Sheets50Consolidated Statements of Cash Flows51Consolidated Statements of Equity52Notes to Consolidated Financial Statements53

45

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of DXP Enterprises, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of DXP Enterprises,