DXP Enterprises plans to transition to new accounting firm in 2022
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HOUSTON – (BUSINESS WIRE) –
DXP Enterprises, Inc. (NASDAQ: DXPE) on Friday, November 12, 2021, filed an 8-K with the SEC regarding its plans to transition to a new audit firm for the remainder of fiscal 2021 and for fiscal 2022. The Company has determined that in order complete her 2021 audit in a timely manner, rather than waiting for her current auditor to complete her review of the Q3 10-Q form before resigning, she should immediately replace her current auditor so that the review of the company’s Q3 form 10-Q and its full-year audit and review of its internal controls could be performed in parallel. Management believes this will give it the best chance of completing its fiscal year 2021 audit on time and facilitate a successful transition to a new accounting firm in fiscal 2022.
In view of the unexpected nature of the circumstances, the time it is late in the year and the current compression of the resources of accounting firms in the market, the Company has made the decision to appoint McConnell & Jones LLP (” McConnell Jones’) given the firm’s willingness to devote substantial resources to the audit and the breadth, experience and ability to perform an integrated audit. The Company has made the decision to select McConnell Jones as interim auditor until the Company can further review and facilitate an orderly transition in the first half of fiscal 2022. The Company appreciates McConnell Jones’ willingness to ‘intervene so late in the year. By choosing McConnell Jones, they not only had the staff resources, but they were more than qualified. The extensive experience of the firm’s staff, with roots in four major accounting firms and over thirty years in the business, makes them more than capable of reviewing the Q3 10-Q form and completing the annual audit. As usual in an auditor transition, the Company will select an independent accounting firm registered for fiscal 2022, suitable for the size, scale and complexity of the Company.
Kent Yee, CFO, said: “This plan and recent choices are about the future of DXP and align with our vision and plan for the finance and accounting function. When you are in a growth environment, change is constant and you are looking for partners, solutions and situations that complement your growth. DXP is no different. While we would have preferred a more orderly or conventional transition, that did not apply to these circumstances. As we communicated recently, DXP has always valued conservatism, precision and punctuality considering multiple stakeholders including customers, suppliers, debt and equity investors, rating agencies, etc. . We appreciate McConnell Jones and his willingness to devote short-term resources to delivering our filings on time as we build a bridge to an audit firm that is aligned with our business and our priorities. ”
Gene Padgett, CAD, added, “We will remain focused on continuous improvement and a high bar as we transition to vendors and resources that match DXP. Kent, Stephen (DXP Controller) and I have always talked about aligning DXP-worthy service providers and tools. We are at this inflection point and look forward to our successful transition. ”
Kent Yee, CFO, concluded: “Our next step is to align the partners and the level of expertise and service that matches the size and growth of DXP going forward. DXP’s business and financial health has never been stronger and, as I have said in the past, this can be lost given the unfortunate noise surrounding our recent deposits and the growth process of financial and accounting groups. DXP has done a great job of bouncing back from COVID, managed to reduce the oil and gas exposure of DXP fueled by acquisitions (now less than thirty percent) and continued to invest in the business for the ‘improvement, scalability and performance, as well as the execution of our share buyback program. It is the message that is important.
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading distributor of products and services that add value and total cost reduction solutions to industrial customers in the United States, Canada and Dubai. DXP provides innovative pumping solutions, supply chain services, and maintenance, repair, operation and production (“MROP”) services that emphasize and utilize the extensive product knowledge and DXP’s technical expertise in rotating equipment, bearings, power transmission, metalworking, industrial supplies and safety. products and services. DXP’s portfolio of MROP products and service solutions enables DXP to be flexible and customer-focused, creating competitive advantages for our customers. DXP’s business lines include service centers, innovative pumping solutions and supply chain services. For more information, visit www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral or other written statements made or to be made by the Company) contains forward-looking statements. These forward-looking statements include, without limitation, those regarding the Company’s expectations regarding the impact and resumption of the COVID-19 pandemic and the impact of low oil and gas commodity prices; the business of the Company, the future profitability of the Company, its cash flow, liquidity and growth. Such forward-looking information involves significant risks and uncertainties which could significantly affect the expected results in the future; and therefore, these results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to: declining prices for oil and natural gas; declines in spending levels in the oil and gas industry, which may result from lower oil and gas prices or other factors; ability to raise necessary capital, dependence on existing management, leverage and debt service, national or global economic conditions, economic risks associated with the impact of COVID-19, ability to manage changes and the health or continued availability of management personnel and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by words such as, but not limited to, “may”, “will”, “should”, “intend”, “expect”, “Plan”, “anticipate”, “” believe ”,“ estimate ”,“ predict ”,“ potential ”,“ objective ”or“ continue ”or the negative of these terms or other comparable terminology. For more information, see the documents filed by the company with the Securities and Exchange Commission. Further information on these risks and other potential factors that could affect the business and financial results of the Company is included in the documents filed by the Company with the SEC, including in the sections “Risk Factors” and “Management’s Discussion and Analysis of the Financial Position and Results of Operations” of the latest periodic reports filed by the Company on Forms 10-K and 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which relate to their respective dates.
Kent Yee, 713-996-4700
Senior Vice President, Chief Financial Officer
Source: DXP Enterprises, Inc.