DXP企業第二季銷售純利雙位數增長 純利2871萬美元

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended June 30, 2026

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from __________ to __________

Commission file number 0-21513
DXP Enterprises, Inc.
(Exact name of registrant as specified in its charter)

Texas76-0509661
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)

5301 Hollister, Houston, Texas 77040

(Address of principal executive offices, including zip code)

(713) 996-4700

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each ClassTrading SymbolName of Exchange on which Registered
Common Stock par value $0.01DXPENASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒    Accelerated filer ☐    Non-accelerated filer ☐    Smaller reporting company ☐    
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of registrant's Common Stock, par value $0.01 per share outstanding as of August 3, 2026: 15,517,148.

DXP ENTERPRISES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

Page
PART I: FINANCIAL INFORMATION

ITEM 1. Financial Statements
3

    a) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income
3

    b) Unaudited Condensed Consolidated Balance Sheets
4

    c) Unaudited Condensed Consolidated Statements of Cash Flows
5

    d) Unaudited Condensed Consolidated Statements of Equity
6

    e) Notes to Unaudited Condensed Consolidated Financial Statements
7

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
23

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
36

ITEM 4. Controls and Procedures
37

PART II: OTHER INFORMATION
38

ITEM 1. Legal Proceedings
38

ITEM 1A. Risk Factors
38

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
38

ITEM 3. Default upon Senior Securities
38

ITEM 4. Mine Safety Disclosures
38

ITEM 5. Other Information
38

ITEM 6. Exhibits
39

SIGNATURES
40

2

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

DXP ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
AND COMPREHENSIVE INCOME
(in thousands, except per share amounts) (unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025

Sales$576,461 $498,682 $1,098,119 $975,251 
Cost of sales393,394 340,869 746,446 667,173 
Gross profit183,067 157,813 351,673 308,078 
Selling, general and administrative expenses127,574 111,827 253,706 221,577 
Income from operations55,493 45,986 97,967 86,501 
Interest expense16,831 14,744 33,274 29,404 
Other income, net (Note 15)
(1,059)(354)(1,653)(1,672)
Income before income taxes39,721 31,596 66,346 58,769 
Provision for income taxes (Note 7)
11,013 7,984 17,660 14,568 
Net income 28,708 23,612 48,686 44,201 

Preferred stock dividend22 22 45 45 
Net income attributable to common shareholders$28,686 $23,590 $48,641 $44,156 

Net income $28,708 $23,612 $48,686 $44,201 
Foreign currency translation adjustments(1,491)2,563 (2,955)2,649 
Comprehensive income $27,217 $26,175 $45,731 $46,850 

Earnings per share (Note 9):

     Basic$1.85 $1.50 $3.13 $2.81 
     Diluted$1.76 $1.43 $2.98 $2.67 

Weighted average common shares outstanding:
     Basic15,505 15,694 15,518 15,696 
     Diluted16,345 16,534 16,358 16,536 
 

 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

DXP ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts) (unaudited)

June 30, 2026December 31, 2025
ASSETS
Current assets:
Cash$226,618 $303,783 

Accounts receivable, net of allowance of $3,999 and $3,995, respectively
439,938 397,502 
Inventories121,394 108,144 
Costs and estimated profits in excess of billings58,958 53,855 
Prepaid expenses and other current assets41,907 47,033 

Total current assets888,815 910,317 
Property and equipment, net120,193 114,822 
Goodwill560,526 494,561 
Other intangible assets, net116,452 81,351 
Operating lease right of use assets, net72,058 74,709 
Other long-term assets11,466 9,395 
Total assets$1,769,510 $1,685,155 

LIABILITIES AND EQUITY
Current liabilities:
Current maturities of debt$8,580 $8,580 
Trade accounts payable133,724 116,765 
Accrued wages and benefits50,855 51,180 
Customer advances12,760 15,460 
Billings in excess of costs and estimated profits21,633 15,689 

Short-term operating lease liabilities19,522 19,038 
Other current liabilities49,875 45,769 
Total current liabilities296,949 272,481 

Long-term debt, net of unamortized debt issuance costs and discounts
816,365 818,476 
Long-term operating lease liabilities54,534 57,509 
Other long-term liabilities60,921 38,250 

Total long-term liabilities931,820 914,235 
Total liabilities1,228,769 1,186,716 
Commitments and Contingencies (Note 10)

Shareholders' equity:
Series A preferred stock, $1.00 par value; 1,000,000 shares authorized
1 1 
Series B preferred stock, $1.00 par value; 1,000,000 shares authorized
15 15 
Common stock, $0.01 par value, 100,000,000 shares authorized; 20,395,157 issued and 15,505,100 outstanding at June 30, 2026 and 20,403,647 issued and 15,513,590 outstanding at December 31, 2025
204 204 
Additional paid-in capital217,297 220,681 
Retained earnings526,898 478,257 
Accumulated other comprehensive loss(33,562)(30,607)
Treasury stock, at cost 4,890,057 and 4,890,057 shares, respectively
(170,112)(170,112)
Total DXP Enterprises, Inc. equity540,741 498,439 

Total liabilities and equity$1,769,510 $1,685,155 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

DXP ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)

Six Months Ended June 30,
20262025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $48,686 $44,201 
Reconciliation of net income to net cash provided by operating activities:
Depreciation6,004 4,836 
Amortization of intangibles and finance lease assets
18,250 13,788 
Amortization of debt issuance costs2,254 1,927 
Loss (gain) on sale of property and equipment237 (332)
Provision for (recovery of) credit losses69 (1,085)
Payment of contingent consideration liability in excess of acquisition-date fair value(32)(333)
Fair value adjustment on contingent consideration714 728 
Restricted stock compensation expense3,268 2,800 
Deferred income taxes7,100 7,036 
Other non-cash items(6,184)(4,999)
Changes in operating assets and liabilities, net of effects of businesses acquired:

Accounts receivable(20,767)(15,972)
Costs and estimated profits in excess of billings(1,126)(6,443)
Inventories(10,702)(4,336)
Prepaid expenses and other assets(1,449)(3,250)
Trade accounts payable
10,702 (3,159)
Accrued expenses
474 3,675 
Billings in excess of costs and estimated profits(127)9,823 
Income taxes4,584 (27,286)

Net cash provided by operating activities$61,955 $21,619 

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment(5,915)(30,260)
Proceeds from the sale of property and equipment567 2,715 
Acquisition of businesses, net of cash acquired(112,945)(13,860)
Net cash used in investing activities$(118,293)$(41,405)

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal debt payments(4,240)(3,248)
Debt issuance costs(125)(125)

Payment for acquisition contingent consideration liability(3,468)(5,145)
Preferred stock dividends paid(45)(45)
Payment for employee taxes withheld from stock awards(6,652)(4,330)
Principal payments on finance leases(4,444)(3,701)
Net cash used in financing activities
$(18,974)$(16,594)
Effect of foreign currency on cash(1,853)899 
Net change in cash and restricted cash(77,165)(35,481)
Cash and restricted cash at beginning of period303,783 148,411 
Cash and restricted cash at end of period$226,618 $112,930 

Supplemental cash flow information (Note 14)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

DXP ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in thousands) (unaudited)

Series A preferred stockSeries B preferred stockCommon stockPaid-in capitalRetained earningsAccum other comp lossTreasury StockTotal equity
Balance at December 31, 2025$1 $15 $204 $220,681 $478,257 $(30,607)$(170,112)$498,439 
Preferred dividends paid— — — — (23)— — (23)
Compensation expense for restricted stock
— — — 1,802 — — — 1,802 

Tax related items for share based awards— — — (6,535)— — — (6,535)

Currency translation adjustment— — — — — (1,464)— (1,464)

Net income
— — — — 19,978 — — 19,978 
Balance at March 31, 2026$1 $15 $204 $215,948 $498,212 $(32,071)$(170,112)$512,197 
Preferred dividends paid— — — — (22)— — (22)
Compensation expense for restricted stock
— — — 1,466 — — — 1,466 

Tax related items for share based awards— — — (117)— — — (117)
Currency translation adjustment— — — — — (1,491)— (1,491)

Net income
— — — — 28,708 — — 28,708 
Balance at June 30, 2026$1 $15 $204 $217,297 $526,898 $(33,562)$(170,112)$540,741 

Series A preferred stockSeries B preferred stockCommon stockPaid-in capitalRetained earningsAccum other comp lossTreasury StockTotal equity
Balance at December 31, 2024$1 $15 $204 $219,511 $389,670 $(33,610)$(153,003)$422,788 
Preferred dividends paid— — — — (23)— — (23)
Compensation expense for restricted stock— — — 1,317 — — — 1,317 

Tax related items for share based awards— — — (126)— — — (126)

Currency translation adjustment— — — — — 86 — 86 

Excise tax on share repurchases— — — — — — 28 28 
Net income
— — — — 20,589 — — 20,589 
Balance at March 31, 2025$1 $15 $204 $220,702 $410,236 $(33,524)$(152,975)$444,659 
Preferred dividends paid— — — — (22)— — (22)
Compensation expense for restricted stock— — — 1,483 — — — 1,483 

Tax related items for share based awards— — — (4,203)— — — (4,203)

Currency translation adjustment— — — — — 2,563 — 2,563 

Net income
— — — — 23,612 — — 23,612 
Balance at June 30, 2025$1 $15 $204 $217,982 $433,826 $(30,961)$(152,975)$468,092 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

6

DXP ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - THE COMPANY

DXP Enterprises, Inc. together with its subsidiaries (collectively "DXP," the "Company," "us," "we," or "our") was incorporated in Texas on July 26, 1996. The Company and its subsidiaries are engaged in the business of distributing maintenance, repair and operating ("MRO") products, and service to customers serving a variety of end markets. Additionally, the Company provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to energy and industrial customers. The Company is organized into three business segments: Service Centers ("SC"), Innovative Pumping Solutions ("IPS"), and Supply Chain Services ("SCS"). See Note 11 - Segment Reporting for discussion of the business segments.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING AND BUSINESS POLICIES

Basis of Presentation
The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission ("SEC") not all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP are required for interim reporting periods. The unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2025 that are included in our annual report on Form 10-K filed with the SEC on February 26, 2026 (“Annual Report”).

At times, certain reclassifications may be made to the prior year’s unaudited condensed consolidated financial statements to conform to the current year's presentation. Such reclassifications do not have a material effect on our unaudited condensed consolidated statements of operations and comprehensive income, balance sheets, cash flows or equity.

The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of results expected for the full fiscal year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company's financial position, results of operations and cash flows for the interim periods presented.

All intercompany accounts and transactions have been eliminated in consolidation.

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

All new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued Accounting Standards Update ("ASU") 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. We have elected to apply the practical expedient. There was no material impact to our unaudited condensed consolidated financial statements.

7

Accounting Pronouncements Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed; management is required to consider whether there is significant uncertainty associated with the development activities of the software. This guidance is effective for all annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the provisions of this ASU.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU would result in additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.

NOTE 4 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Our acquisitions may include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent consideration include management's assumptions about the likelihood of payment based on the established benchmarks and discount rates. The fair value measurement includes inputs that are Level 3 inputs as they are not observable in the market. Should actual results increase or decrease as compared to the assumptions used in our analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Changes in the fair value of the contingent consideration are measured each reporting period and reflected in our results of operations.

As of June 30, 2026, there was $29.8 million in other current and other long-term liabilities for contingent consideration.

The following table provides a reconciliation of the beginning and ending balances and gains or losses recognized during the six months ended June 30, 2026 (in thousands):

Contingent Consideration
Balance at December 31, 2025*
$13,775 
Acquisitions and settlements:
   Acquisitions (Note 12)
18,837 
   Settlements(3,500)
Total remeasurement adjustments:
Changes in fair value recorded in other income, net714 
Balance at June 30, 2026*
$29,826 

*Amounts included in other current liabilities were $12.7 million and $9.4 million for the periods ending June 30, 2026 and December 31, 2025, respectively. Amounts included in other long-term liabilities were $17.1 million and $4.4 million for the periods ending June 30, 2026 and December 31, 2025, respectively.

8

Sensitivity to Changes in Significant Unobservable Inputs

The significant Level 3 unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions are annualized EBITDA forecasts developed by the Company's management and the probability of achievement of those EBITDA results. The discount rate used in the calculations was 8.3 percent as of June 30, 2026. Changes in our unobservable inputs in isolation would result in a change to our fair value measurement. As of June 30, 2026, the maximum amount of contingent consideration payable under these arrangements is $33.0 million over three years.

Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheets at June 30, 2026 and December 31, 2025, but which require disclosure of their fair values include: cash, restricted cash, accounts receivable, trade accounts payable and accrued expenses. The Company believes that the estimated fair value of such instruments at June 30, 2026 and December 31, 2025 approximates their carrying value as reported on the unaudited condensed consolidated balance sheets due to the relative short maturity of these instruments.

See Note 8 - Long-term Debt for fair value disclosures on our asset-backed line of credit and term loan debt under our syndicated credit agreement facilities.

NOTE 5 – INVENTORIES

Inventories are made up of equipment purchased for resale, and materials utilized in the fabrication of industrial and wastewater equipment stated at lower of cost or net realizable value, primarily determined using the weighted average cost method. The Company reviews inventory and records provisions for the difference between cost and net realizable value arising from excess and obsolete items on hand based upon the aging of the inventories, market trends, and continued demand.

The carrying values of inventories are as follows (in thousands):

June 30, 2026December 31, 2025
Finished goods$107,498 $98,089 
Work in process13,896 10,055 
Inventories$121,394 $108,144 

NOTE 6 – CONTRACT ASSETS AND LIABILITIES

Under our customized pump production and water and wastewater project contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets presented as "Costs and estimated profits in excess of billings." However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities that are presented as "Billings in excess of costs and estimated profits" on our unaudited condensed consolidated balance sheets.

Costs and estimated profits on uncompleted contracts and related amounts billed were as follows (in thousands):

June 30, 2026December 31, 2025
Costs incurred on uncompleted contracts$248,513 $147,866 
Estimated profits, thereon123,376 71,260 
Total costs and estimated profits on uncompleted contracts371,889 219,126 
Less: billings to date334,564 180,960 
Net$37,325 $38,166 

9

Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for June 30, 2026 and December 31, 2025 under the following captions (in thousands):

June 30, 2026December 31, 2025
Costs and estimated profits in excess of billings$58,958 $53,855 
Billings in excess of costs and estimated profits(21,633)(15,689)

Net$37,325 $38,166 

During the six months ended June 30, 2026 and 2025, $3.2 million and $3.1 million of the balances that were previously classified as contract liabilities at the beginning of the period were recognized in revenues, respectively. Contract asset and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.

NOTE 7 – INCOME TAXES

The following table presents provision for income taxes (in thousands, except for effective tax rates):  

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Income before provision for income taxes$39,721 $31,596 $66,346 $58,769 
Provision for income taxes11,013 7,984 17,660 14,568 
Effective tax rate27.7 %25.3 %26.6 %24.8 %

We are subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in determining our provision for income taxes and evaluating our uncertain tax positions. The effective tax rate increased primarily due to discrete items, including updates to the tax reserves, which reflect our ongoing assessment of uncertain tax positions, including research and development tax credits for which we believe our position is supportable and intend to dispute any proposed IRS adjustments, a decrease in tax benefits related to stock-based compensation vested during the period, net of amounts limited by Section 162(m), and an increase in non-deductible expenses.

While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is not more-likely-than-not that the position will be sustained upon review, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state, and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities.

The Organization of Economic Cooperation and Development (“OECD”) continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024. As of June 30, 2026, the impact of Pillar Two is expected to be immaterial to the Company based on current legislation enacted to date.

10

NOTE 8 – LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

June 30, 2026December 31, 2025

ABL Revolver$— $— 
Senior Secured Term Loan B due October 13, 2030(1)
841,645 845,885 

Promissory Note due November 1, 2029900 900 
Total debt
842,545 846,785 
Less: current maturities
(8,580)(8,580)
Total long-term debt
$833,965 $838,205 
Unamortized discount and debt issuance costs
17,600 19,729 
Long-term debt, net of unamortized discount and debt issuance costs
$816,365 $818,476 
(1) The fair value of the Amended Term Loan B due October 13, 2030 using level 2 input values was $846.4 million and $854.3 million as of June 30, 2026 and December 31, 2025, respectively.

Senior Secured Term Loan B:

On December 16, 2025, the Company entered into an amendment (the “Term Loan Amendment”), by and among the Company, certain of the Company’s subsidiaries, as guarantors (the “Guarantors”), the incremental lenders party thereto and Goldman Sachs Bank USA as agent (the “Agent”). 

The Term Loan Amendment amends and supplements the Term Loan and Security Agreement, dated as of December 23, 2020, by and among the Company, the Guarantors, the lenders party thereto and the Agent (as amended by Amendment No. 1 and Joinder Agreement to Term Loan and Security Agreement, dated as of November 22, 2022, as further amended by Amendment No. 2 and Joinder Agreement to Term Loan and Security Agreement, dated as of October 13, 2023, and as further amended by Amendment No. 3 and Joinder Agreement to Term Loan and Security Agreement, dated as of October 3, 2024, the “Existing Term Loan Agreement”; the Existing Term Loan Agreement, as further amended by the Term Loan Amendment, the “Term Loan Agreement”). 

The Term Loan Amendment provides for, among other things, (i) adjustments to certain financial ratio covenant compliance dates and (ii) $205.0 million in new incremental term loan commitments (the “2025 Incremental Term Loans”) under the Term Loan Agreement, such that after giving effect to the Term Loan Amendment, including the 2025 Incremental Term Loans, the Company has $848.0 million in outstanding borrowings under the Term Loan Agreement. 

The Senior Secured Term Loan B amortizes in equal quarterly installments of 0.25 percent, with the remaining balance being payable on October 13, 2030, when the facility matures. 

As of June 30, 2026 there was $841.6 million outstanding under the Senior Secured Term Loan B.

Interest rate

Quarterly interest payments accrue on outstanding borrowings under the Senior Secured Term Loan B at a rate equal to Term SOFR (with a floor of 1.00%) plus 3.25%, or base rate plus 2.25%. The Senior Secured Term Loan B is guaranteed by each of the Company’s direct and indirect material wholly owned subsidiaries, other than any of the Company’s Canadian subsidiaries and certain other excluded subsidiaries.

The interest rate for the Senior Secured Term Loan B was 6.89 percent and 7.17 percent as of June 30, 2026 and December 31, 2025, respectively.

11

Facility Size Increases

The Senior Secured Term Loan B allows for incremental increases in facility size up to an aggregate of $100 million. 

Prepayments

We are required to repay the Senior Secured Term Loan B with 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 percent of excess cash flow, as defined in the Senior Secured Term Loan B, reducing to 25 percent 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.

Restrictive Covenants

The Company’s primary financial covenant under the Senior Secured Term Loan B is a Secured Leverage Ratio. The Senior Secured Term Loan B Agreement requires that the Company’s Secured Leverage Ratio as of June 30, 2026 to be less than 5.75 to 1.00.

As of June 30, 2026, the Company’s Secured Leverage Ratio was 2.30 to 1.00. 

ABL Revolver: 

On July 1, 2025, the Company entered into an Increase Agreement (the “Increase Agreement”) to which the aggregate commitments under the Company's existing asset-based revolving credit facility (the "ABL Facility") were increased by $50 million. Following the effectiveness of the Increase Agreement, the total commitments under the ABL Facility increased from $135.0 million to $185.0 million. Subject to the conditions set forth in the ABL Credit Agreement, the ABL Revolver may be increased in increments of $10.0 million up to an aggregate of $50.0 million. The ABL Revolver matures on July 19, 2027. Interest accrues on outstanding borrowings at a rate equal to Secured Overnight Financing Rate (“SOFR”) or Canadian Dollar Offered Rate (“CDOR”) plus a margin ranging from 1.25 percent to 1.75 percent per annum, or at an alternate base rate, Canadian prime rate or Canadian base rate plus a margin ranging from 0.25 percent to 0.75 percent per annum, in each case, based upon the average daily excess availability under the ABL Revolver for the most recently completed calendar quarter. Fees payable on the unused portion of the facility range from 0.25 percent to 0.375 percent per annum. At June 30, 2026 the unused line fee was 0.375 percent and there were no amounts outstanding under the ABL Revolver.

On July 2, 2026, the Company e