We are subject to various risks and uncertainties in the course of our business.
−Removed: Investing in DXP involves risk.
−Removed: In deciding whether to invest in DXP, 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.
+Added: Investing in the Company involves risk.
+Added: 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.
−Removed: Readers should not consider any descriptions of these factors to be a complete set of all potential risks that could affect DXP.
+Added: 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.
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• The loss of or the failure to attract and retain key personnel could adversely impact our results of operations.
−Removed: • The loss of any key supplier could adversely affect DXP’s sales and profitability.
+Added: • The loss of any key supplier could adversely affect the Company’s sales and profitability.
• Our future results will be impacted by our ability to implement our internal growth strategy.
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Market and Economy
−Removed: • The COVID-19 pandemic has and could continue to result in disruptions in supply chain, decreased customer demand, lower oil price and volatility in the stock market and the global economy, as well as impact senior management, which could negatively impact our business, financial position, and results of operations.
−Removed: • A general slowdown in the economy could negatively impact DXP’s sales growth and profitability.
+Added: • The COVID-19 pandemic has and could continue to result in disruptions in supply chain, decreased customer demand, lower oil price and volatility in the stock market and the global economy, which could negatively impact our business, financial position, and results of operations.
+Added: • A general slowdown in the economy could negatively impact the Company’s sales growth and profitability.
• We could be adversely impacted by low oil prices, volatility in oil prices and downturns in the energy industry, including decreased capital expenditures, impacting our customers’ demand for our products and services.
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Credit and Access to Debt Capital
−Removed: • We may not be able to refinance on favorable terms or may not refinance, extend or repay our debt, which could adversely affect our results of operations or may result in default of our debt.
+Added: • We may not be able to refinance on favorable terms, extend, or repay our debt, which could adversely affect our results of operations or may result in default of our debt.
• Our failure to comply with financial covenants of our credit facilities may adversely affect our results of operations and our financial conditions.
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The following are more detailed discussions of our Risk Factors summarized above:
−Removed: Risk Related to DXP's Business and Operations
+Added: Risk Related to the Company's Business and Operations
Demand for our products could decrease if the manufacturers of those products sell them directly to end users.
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Our utilization of these delivery services for shipments is subject to risks, including increases in fuel prices, labor availability, labor strikes and inclement weather, which may impact a shipping company’s ability to provide delivery services that adequately meet our shipping needs.
−Removed: If we change the shipping companies we use, we could face
−Removed: logistical difficulties that could adversely affect deliveries and we would incur costs and expend resources in connection with such change.
+Added: If we change the shipping companies we use, we could face logistical difficulties that could adversely affect deliveries and we would incur costs and expend resources in connection with such change.
In addition, we may not be able to obtain favorable terms as we have with our current third-party transportation providers.
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Our competitors include catalog suppliers, large warehouse stores and, to a lesser extent, certain manufacturers.
−Removed: Competitive pressures could adversely affect DXP’s sales and profitability.
+Added: Competitive pressures could adversely affect the Company's sales and profitability.
The loss of or the failure to attract and retain key personnel could adversely impact our results of operations.
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The failure to attract and retain such persons could materially adversely affect our financial condition and results of operations.
−Removed: The loss of any key supplier could adversely affect DXP’s sales and profitability.
+Added: The loss of any key supplier could adversely affect the Company’s sales and profitability.
We have distribution rights for certain product lines and depend on these distribution rights for a substantial portion of our business.
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Interruptions in the proper functioning of our information systems could disrupt operations and cause increases in costs and/or decreases in revenues.
−Removed: The proper functioning of DXP’s information systems is critical to the successful operation of our business.
+Added: The proper functioning of the Company's information systems is critical to the successful operation of our business.
Our information systems are vulnerable to natural disasters, power losses, telecommunication failures and other problems despite the protection of our information systems through physical and software safeguards and remote processing capabilities.
−Removed: If critical information systems fail or are otherwise unavailable, DXP’s ability to procure products to sell, process and ship customer orders, identify business opportunities, maintain proper levels of inventories, collect accounts receivable and pay accounts payable and expenses could be adversely affected.
+Added: If critical information systems fail or are otherwise unavailable, The Company's ability to procure products to sell, process and ship customer orders, identify business opportunities, maintain proper levels of inventories, collect accounts receivable and pay accounts payable and expenses could be adversely affected.
Cybersecurity breaches and other disruptions or misuse of our network and information systems could affect our ability to conduct our business effectively.
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In addition, projects may remain in our backlog for an extended period of time.
−Removed: During periods of economic slowdown, or decreases and/or instability in oil prices, the risk of projects
−Removed: being suspended, delayed or canceled generally increases.
+Added: During periods of economic slowdown, or decreases and/or instability in oil prices, the risk of projects being suspended, delayed or canceled generally increases.
Finally, poor project or contract performance could also impact our backlog.
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If we do not successfully remediate our internal controls weaknesses, our financial statements may not be accurate and the trading price of our stock could be negatively impacted.
−Removed: As discussed in Item 9A, “Management's Report on Internal Controls Over Financial Reporting,” we concluded we have material weaknesses in our internal controls during 2021.
+Added: As discussed in Item 9A, “Management's Report on Internal Control Over Financial Reporting,” we concluded we have material weaknesses in our internal controls during 2022.
If we fail to successfully remediate these weaknesses, our financial statements may not be accurate and the trading price of our stock could be negatively impacted.
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Competition for qualified employees is intense and the process of locating qualified key personnel may be lengthy and expensive.
−Removed: If any of our executive management team contract COVID-19, we may lose their services for an extended period of
−Removed: time, which would likely have a negative impact on our business and operations.
+Added: If any of our executive management team contract COVID-19, we may lose their services for an extended period of time, which would likely have a negative impact on our business and operations.
If we experience widespread cases of COVID-19 or its variants among our employees, it would place more pressure on the remaining employees to perform all functions across the organization while maintaining their health, may require us to take remediation measures, and could impair our ability to conduct business.
We may not be successful in retaining our key employees or finding adequate replacements for lost personnel.
−Removed: A general slowdown in the economy could negatively impact DXP’s sales growth and profitability.
−Removed: Economic and industry trends affect DXP’s business.
+Added: A general slowdown in the economy could negatively impact the Company's sales growth and profitability.
+Added: Economic and industry trends affect the Company's business.
Demand for our products is subject to economic trends affecting our customers and the industries in which they compete in particular.
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Low oil prices and the resulting downturns or lack of growth in the energy industry and energy related business could adversely impact our results of operations and financial condition.
−Removed: The volatility of crude oil prices since February 2020 has negatively impacted the oil and gas industry and may cause worsening conditions of energy companies, oilfield services companies, and related businesses.
A significant portion of our revenue depends upon the level of capital and operating expenditures in the oil and natural gas industry, including capital expenditures in connection with the upstream, midstream, and downstream phases in the energy industry.
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Our credit facilities require the Company to comply with certain specified covenants, restrictions, financial ratios and other financial and operating tests.
−Removed: The Company’s ability to comply with any of the foregoing restrictions will depend on its future
−Removed: performance, which will be subject to prevailing economic conditions and other factors, including factors beyond the Company’s control.
+Added: The Company’s ability to comply with any of the foregoing restrictions will depend on its future performance, which will be subject to prevailing economic conditions and other factors, including factors beyond the Company’s control.
A failure to comply with any of these obligations could result in an event of default under the credit facilities, which could permit acceleration of the Company’s indebtedness under the credit facilities.
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In addition, our products are integral to the production process for some end-users, and a failure of our products could result in a business interruption of their operations.
−Removed: Although we maintain quality controls and procedures, our
−Removed: products may not be completely free from defects and/or malfunction or failure.
+Added: Although we maintain quality controls and procedures, our products may not be completely free from defects and/or malfunction or failure.
We maintain various levels and types of insurance coverage that we believe are adequate and commensurate with normal industry practice for a company of our risk profile, relative size, and we further limit our liability by contract wherever possible.
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We are also subject to audits and inquiries in the ordinary course of business.
−Removed: Changes to the legal and regulatory environments could increase the cost of doing business, and such costs
−Removed: may increase in the future as a result of changes in these laws and regulations or in their interpretation.
+Added: Changes to the legal and regulatory environments could increase the cost of doing business, and such costs may increase in the future as a result of changes in these laws and regulations or in their interpretation.
Our employees, contractors or agents may violate laws and regulations despite our attempts to implement policies and procedures to comply with such laws and regulations.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.