NOTE 11: SUBSEQUENT EVENTS

In May 2009, the FASB issued authoritative guidance which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The authoritative guidance provides guidance on the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The Company evaluated subsequent events through the date this report was filed with the SEC.

On July 11, 2012, DXP completed the acquisition of HSE Integrated Ltd. ("HSE"). Through its wholly-owned subsidiary, DXP Canada Enterprises Ltd., DXP acquired all of the outstanding common shares of HSE by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). Pursuant to the Arrangement, HSE shareholders received CDN $1.80 in cash per each common share of HSE held. The total transaction value is approximately $85 million, including approximately $4 million in debt and approximately $3 million in transaction costs. The purchase price was financed with borrowings under DXP's new $325 million credit facility. DXP acquired HSE to expand our industrial health and safety services offering.

On July 11, 2012 DXP entered into a credit facility (the "Facility") with Wells Fargo Bank, National Association, as Issuing Lender, Swingline Lender and Administrative Agent for the lenders. The Facility consists of a $100 million term loan and a revolving credit facility that provides a $225 million line of credit to the Company. This Facility replaces the Company's prior credit facility, which was last amended on December 30, 2011 and consisted of a $200 million revolving credit facility.

The new facility expires on July 11, 2017. The Facility contains financial covenants defining various financial measures and levels of these measures with which the Company must comply. Covenant compliance is assessed as of each quarter end. Approximately $0.7 million of debt issuance costs associated with the prior credit facility will be expensed in the third quarter of 2012.

DXP has not completed appraisals of intangibles or property and equipment for HSE. DXP has made preliminary estimates for purposes of this disclosure. The estimate of goodwill for this acquisition is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. It specifically includes the expected synergies and other benefits that we believe will result from combining the operations of HSE with the operations of DXP and any intangible assets that do not qualify for separate recognition such as the assembled workforce. None of the estimated $17 million of goodwill is expected to be tax deductible. All of the goodwill and operations of HSE are expected to be included in the Service Centers segment.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed in the acquisition of HSE (in millions):

Cash	$ 11
Accounts Receivable, net	24
Inventory, net	-
Property and equipment	33
Goodwill and intangibles	47
Other assets	2
Assets acquired	117
Current liabilities assumed	(14)
Non-current liabilities assumed	(18)
Net assets acquired	$ 85

The preliminary estimated pro forma unaudited results of operations for the Company on a consolidated basis for the three months and six months ended June 30, 2011 and 2012, assuming the acquisition of HSE was consummated as of January 1, 2011 follows (unaudited, in thousands, except per share data):

	Three Months Ended June 30		Six Months Ended June 30
	2012	2011	2012	2011
Net sales	$290,481	$223,399	$570,872	$431,296
Net income	12,696	7,654	25,588	13,493
Per share data
Basic earnings	$0.88	$0.53	$1.78	$0.94
Diluted earnings	$0.83	$0.50	$1.68	$0.89