Full Year Revenue Up 14.9% to $1.80B; Fourth Quarter Organic Sales Growth Drives Strong Cash Flow
Distribution Solutions Group, Inc. (NASDAQ:DSGR) ("DSG" or the "Company"), a premier specialty distribution company, today announced consolidated results for the full year and fourth quarter ended December 31, 2024. This press release is supplemented by an earnings presentation at https://investor.distributionsolutionsgroup.com/news/events.
The following represents a summary of certain operating results (unaudited). See the reconciliations of GAAP to non-GAAP measures in Tables 2 and 5.
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||||||||||||||||
|
December 31, |
|
September 30, |
|
December 31, |
|||||||||||||||||||||||
(Dollars in thousands) |
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|||
Revenue |
$ |
480,463 |
|
|
$ |
405,239 |
|
|
18.6 |
% |
|
$ |
468,019 |
|
|
2.7 |
% |
|
$ |
1,804,104 |
|
|
$ |
1,570,402 |
|
|
14.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income |
$ |
20,067 |
|
|
$ |
(289 |
) |
|
N/M |
|
|
$ |
18,947 |
|
|
5.9 |
% |
|
$ |
55,955 |
|
|
$ |
42,991 |
|
|
30.2 |
% |
Non-GAAP adjusted operating income(1) |
$ |
37,293 |
|
|
$ |
28,006 |
|
|
33.2 |
% |
|
$ |
42,458 |
|
|
(12.2 |
)% |
|
$ |
148,364 |
|
|
$ |
133,711 |
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Non-GAAP adjusted EBITDA |
$ |
44,899 |
|
|
$ |
33,880 |
|
|
32.5 |
% |
|
$ |
49,110 |
|
|
(8.6 |
)% |
|
$ |
175,257 |
|
|
$ |
157,036 |
|
|
11.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss) as a percent of revenue |
|
4.2 |
% |
|
|
(0.1 |
)% |
|
430bps |
|
|
4.0 |
% |
|
20bps |
|
|
3.1 |
% |
|
|
2.7 |
% |
|
40bps |
|||
Adjusted EBITDA as a percent of revenue |
|
9.3 |
% |
|
|
8.4 |
% |
|
90bps |
|
|
10.5 |
% |
|
-120bps |
|
|
9.7 |
% |
|
|
10.0 |
% |
|
-30bps |
|||
| (1) | In the first quarter of 2024, the Company changed the treatment of amortization of intangible assets to be included in the calculation of Non-GAAP adjusted operating income. Prior periods have been adjusted to conform to current period presentation. |
|
N/M - Not meaningful |
||
Bryan King, CEO and Chairman, said, "Our fourth quarter top-line performance was in line with expectations, delivering consolidated total sales expansion of 18.6% and organic sales growth up 3.5% over a year ago. Adjusted EBITDA in the quarter grew to $44.9 million or 9.3% of sales compared to $33.9 million or 8.4% a year ago. As expected, inclusion of the 2024 Source Atlantic acquisition compressed our net margins by approximately 50bps for the quarter. During the quarter we generated cash flow from operations of $45.7 million. Sequentially compared to the third quarter, total sales grew by 2.7% while, as expected, Adjusted EBITDA contracted due to fewer selling days and a full quarter of the Source Atlantic acquisition that initially has a lower margin profile that we will be expanding.
"Despite the soft economic backdrop that existed for most of 2024, we are pleased with our full-year performance as revenues grew by 14.9% to $1.8 billion and Adjusted EBITDA expanded to $175.3 million, up 11.6%. During 2024 we deployed approximately $216.0 million of capital in five strategic acquisitions. During the fourth quarter, we closed on two small acquisitions, ConRes Test Equipment and Tech-Component Resources, to expand our service offerings and support our customer expansion efforts. While we are early in the integration process of our five 2024 acquisitions, we firmly believe these will strengthen our position as a specialty distribution company.
"We remain highly focused on long-term value creation through the growth of our industrial distribution platform and the compounding effect of our cash flow reinvestment. We continue to build a structurally higher-margin business by strategically scaling our platform through organic growth and highly strategic M&A. Our acquisitions are targeted to improve and expand our high-touch, value-added distribution solutions to the MRO, OEM, and Industrial Technologies verticals in a diversified set of end markets. Our focus on capital returns and generating high cash flow conversion rates positions us well to maximize long-term value for our shareholders," concluded Mr. King.
2024 Full Year Summary(1)
- Revenue was $1.80 billion, an increase of $233.7 million or 14.9% including $268.2 million of partial-year revenue from five acquisitions closed in 2024 and one acquisition closed in 2023 not in for the full year of 2023. Organic revenue decreased 2.6% for 2024 versus 2023.
- Operating income increased $13.0 million from the prior year to $56.0 million, net of acquired intangible amortization of $47.5 million and $44.9 million of non-recurring severance and acquisition-related retention costs, stock-based compensation, acquisition-related costs and other non-recurring items. Adjusted operating income, excluding these non-cash and non-recurring items, grew 11.0% to $148.4 million compared to $133.7 million in 2023.
- Adjusted EBITDA grew to $175.3 million in 2024, or 9.7% of revenue, compared to $157.0 million or 10.0% of revenue in the prior year. Excluding the impact of the Source Atlantic acquisition, Adjusted EBITDA as a percentage of revenue would have been 9.9%.
- Diluted loss per share was $0.16 for the year compared to $0.20 in the year-ago period. Non-GAAP adjusted diluted earnings per share was $1.44 compared to $1.42 in the prior year on higher weighted average shares of 46.8 million in 2024 versus 44.9 million in 2023.
- Expanded the credit facility by $255 million with an additional term loan of $200 million and an increase in the revolver of $55 million to $255 million. The Company ended the year with total liquidity of $334.7 million, consisting of $81.7 million of cash (restricted and unrestricted) and $253.0 million of availability under its credit facility with net debt leverage of 3.5x.
- Cash generated from operations was $56.5 million net of payments for non-recurring acquisition-related retention payments and acquisition costs of $44.7 million. Excluding these items, cash generated from operations was $101.2 million. Uses of cash for 2024 included net capital expenditures of $14.4 million and share repurchases of $2.6 million at an average price of $30.13.
- Deployed capital of approximately $216.0 million completing 5 strategic acquisitions during 2024, expanding our scale and customer base and enhancing our enterprise-wide product offerings.
(1) See reconciliation of GAAP to non-GAAP measures in tables 2, 4 and 5. |
2024 Fourth Quarter Summary(2)
- Generated cash flows from operating activities of $45.7 million in the fourth quarter of 2024, compared to $28.2 million in the year ago quarter.
- Revenue increased $75.2 million, or 18.6%, to $480.5 million, including $61.0 million of partial-year revenue from five acquisitions closed in 2024. Organic sales grew 3.5% over a year ago but seasonally decreased 2.2% sequentially over the third quarter of 2024. Organic average daily sales grew 2.4% over a year ago and 0.4% sequentially over the third quarter of 2024.
- Operating income was $20.1 million, net of $12.6 million of non-cash acquired intangible amortization and $4.7 million of non-recurring severance and acquisition-related retention costs, stock-based compensation, acquisition-related costs and other non-recurring items. This compares to an operating loss of $0.3 million in the prior year quarter, net of similar items as 2024. Adjusted operating income, excluding these non-cash and non-recurring items, was $37.3 million in the current quarter compared to $28.0 million in the year-ago quarter and $42.5 million in the third quarter of 2024.
- Diluted loss per share was $0.55 for the quarter compared to $0.35 in the year-ago quarter. Non-GAAP adjusted diluted earnings per share was $0.42 inclusive of $0.08 for the benefit of lower deferred tax reserves compared to $0.22 for the same period a year ago and $0.37 for the third quarter of 2024.
- Adjusted EBITDA grew $11.0 million to $44.9 million, or 9.3% of sales, compared to $33.9 million, or 8.4% of sales in the prior year quarter. Inclusion of the Source Atlantic acquisition for all of the fourth quarter compressed Adjusted EBITDA as a percentage of sales by approximately 50bps. Sequentially, Adjusted EBITDA decreased by $4.2 million from the third quarter of 2024 and decreased as a percentage of sales by 120bps.
- Completed the acquisitions of ConRes Test Equipment, a leading test and measurement equipment provider and Tech-Component Resources Pte Ltd ("TCR"), a distributor of fasteners, mechanical components, and other industrial products in Southeast Asia serving OEM customers and related applications.
(2) See reconciliation of GAAP to non-GAAP measures in tables 2, 3 and 5. |
Conference Call
Distribution Solutions Group, Inc. will conduct a conference call with investors to discuss 2024 full year and fourth quarter results at 9:00 a.m. Eastern Time on March 6, 2025. The conference call is available by direct dial at 1-888-506-0062 in the U.S. or 1-973-528-0011 from outside of the U.S. The participant access code is 609068. A replay of the conference call will be available by telephone approximately two hours after completion of the call through March 20, 2025. Callers can access the replay by dialing 1-877-481-4010 in the U.S. or 1-919-882-2331 outside the U.S. The passcode for the replay is 51823. A streaming audio of the call and an archived replay will also be available on the investor relations page of Distribution Solutions Group's website. Presentations may be supplemented by a series of slides appearing on the company's investor relations home page at https://investor.distributionsolutionsgroup.com/news/events.
About Distribution Solutions Group, Inc.
Distribution Solutions Group ("DSG") is a premier multi-platform specialty distribution company providing high touch, value-added distribution solutions to the maintenance, repair & operations (MRO), the original equipment manufacturer (OEM) and the industrial technologies markets. DSG was formed through the strategic combination of Lawson Products, a leader in MRO distribution of C-parts, Gexpro Services, a leading global supply chain services provider to manufacturing customers, and TestEquity, a leader in electronic test & measurement solutions.
Through its collective businesses, DSG is dedicated to helping customers lower their total cost of operation by increasing productivity and efficiency with the right products, expert technical support and fast, reliable delivery to be a one-stop solution provider. DSG serves approximately 200,000 customers in several diverse end markets supported by approximately 4,400 dedicated employees and strong vendor partnerships. DSG ships from strategically located distribution and service centers to customers in North America, Europe, Asia, South America and the Middle East.
For more information on Distribution Solutions Group please visit www.distributionsolutionsgroup.com.
This release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the “safe-harbor” provisions under the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. The terms "aim," "anticipate," "believe," "contemplates," "continues," "could," "ensure," "estimate," "expect," "forecasts," "if," "intend," "likely," "may," "might," "objective," "outlook," "plan," "positioned," "potential," "predict," "probable," "project," "shall," "should," "strategy," "will," "would," and variations of them and other words and terms of similar meaning and expression (and the negatives of such words and terms) are intended to identify forward-looking statements.
Forward-looking statements can also be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks, uncertainties and assumptions, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. DSG can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and DSG cautions readers not to place undue reliance on such statements. DSG undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise. Each forward-looking statement speaks only as of the date on which such statement is made, and DSG undertakes no obligation to update any such statement to reflect events or circumstances arising after such date. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Factors that could cause or contribute to such differences or that might otherwise impact DSG’s business, financial condition and results of operations include the risks that DSG may encounter difficulties integrating the business of DSG with the business of other companies that DSG has combined with or may otherwise combine with and that certain assumptions with respect to such business or transactions could prove to be inaccurate. Certain risks associated with DSG’s business are also discussed from time to time in the reports DSG files with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K or other reports the Company may file from time to time with the Securities and Exchange Commission, which should be reviewed carefully.
-TABLES FOLLOW-
Distribution Solutions Group, Inc. Condensed Consolidated Balance Sheets (Dollars in thousands, except share data) (Unaudited) |
|||||||
|
December 31,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
66,479 |
|
|
$ |
83,931 |
|
Restricted cash |
|
15,247 |
|
|
|
15,695 |
|
Accounts receivable, less allowances |
|
250,717 |
|
|
|
213,448 |
|
Inventories |
|
348,226 |
|
|
|
315,984 |
|
Prepaid expenses and other current assets |
|
31,505 |
|
|
|
28,272 |
|
Total current assets |
|
712,174 |
|
|
|
657,330 |
|
Property, plant and equipment, net |
|
125,524 |
|
|
|
113,811 |
|
Rental equipment, net |
|
39,376 |
|
|
|
24,575 |
|
Goodwill |
|
462,789 |
|
|
|
399,925 |
|
Deferred tax asset, net |
|
136 |
|
|
|
95 |
|
Intangible assets, net |
|
269,763 |
|
|
|
253,834 |
|
Cash value of life insurance |
|
19,916 |
|
|
|
18,493 |
|
Right of use operating lease assets |
|
91,962 |
|
|
|
76,340 |
|
Other assets |
|
5,615 |
|
|
|
5,928 |
|
Total assets |
$ |
1,727,255 |
|
|
$ |
1,550,331 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
125,575 |
|
|
$ |
98,674 |
|
Current portion of long-term debt |
|
40,476 |
|
|
|
32,551 |
|
Current portion of lease liabilities |
|
18,951 |
|
|
|
13,549 |
|
Accrued expenses and other current liabilities |
|
81,259 |
|
|
|
97,241 |
|
Total current liabilities |
|
266,261 |
|
|
|
242,015 |
|
Long-term debt, less current portion, net |
|
693,903 |
|
|
|
535,881 |
|
Lease liabilities |
|
77,758 |
|
|
|
67,065 |
|
Deferred tax liability, net |
|
22,265 |
|
|
|
18,326 |
|
Other liabilities |
|
26,525 |
|
|
|
25,443 |
|
Total liabilities |
|
1,086,712 |
|
|
|
888,730 |
|
Stockholders' equity: |
|
|
|
||||
Preferred stock, $1 par value: |
|
|
|
||||
Authorized - 500,000 shares, issued and outstanding — None |
|
— |
|
|
|
— |
|
Common stock, $1 par value: |
|
|
|
||||
Authorized - 70,000,000 shares Issued - 47,738,290 and 47,535,618 shares, respectively Outstanding - 46,856,757 and 46,758,359 shares, respectively |
|
46,856 |
|
|
|
46,758 |
|
Capital in excess of par value |
|
677,473 |
|
|
|
671,154 |
|
Retained deficit |
|
(42,039 |
) |
|
|
(34,707 |
) |
Treasury stock – 881,533 and 777,259 shares, respectively |
|
(19,631 |
) |
|
|
(16,434 |
) |
Accumulated other comprehensive income (loss) |
|
(22,116 |
) |
|
|
(5,170 |
) |
Total stockholders' equity |
|
640,543 |
|
|
|
661,601 |
|
Total liabilities and stockholders' equity |
$ |
1,727,255 |
|
|
$ |
1,550,331 |
|
Distribution Solutions Group, Inc. Condensed Consolidated Statements of Operations (Dollars in thousands, except per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
480,463 |
|
|
$ |
405,239 |
|
|
$ |
1,804,104 |
|
|
$ |
1,570,402 |
|
Cost of goods sold |
|
320,472 |
|
|
|
267,555 |
|
|
|
1,190,329 |
|
|
|
1,018,527 |
|
Gross profit |
|
159,991 |
|
|
|
137,684 |
|
|
|
613,775 |
|
|
|
551,875 |
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses |
|
139,924 |
|
|
|
137,973 |
|
|
|
557,820 |
|
|
|
508,884 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
20,067 |
|
|
|
(289 |
) |
|
|
55,955 |
|
|
|
42,991 |
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(15,365 |
) |
|
|
(12,717 |
) |
|
|
(55,145 |
) |
|
|
(42,774 |
) |
Change in fair value of earnout liabilities |
|
(127 |
) |
|
|
112 |
|
|
|
(988 |
) |
|
|
758 |
|
Other income (expense), net |
|
(440 |
) |
|
|
(113 |
) |
|
|
(358 |
) |
|
|
(2,982 |
) |
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes |
|
4,135 |
|
|
|
(13,007 |
) |
|
|
(536 |
) |
|
|
(2,007 |
) |
Income tax expense (benefit) |
|
30,060 |
|
|
|
3,323 |
|
|
|
6,796 |
|
|
|
6,960 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
(25,925 |
) |
|
$ |
(16,330 |
) |
|
$ |
(7,332 |
) |
|
$ |
(8,967 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per share of common stock |
$ |
(0.55 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per share of common stock |
$ |
(0.55 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding |
|
46,849,345 |
|
|
|
46,804,556 |
|
|
|
46,811,354 |
|
|
|
44,868,862 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average shares outstanding |
|
46,849,345 |
|
|
|
46,804,556 |
|
|
|
46,811,354 |
|
|
|
44,868,862 |
|
Distribution Solutions Group, Inc. Condensed Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) |
|||||||
|
Twelve Months Ended December 31, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Operating activities |
|
|
|
||||
Net income (loss) |
$ |
(7,332 |
) |
|
$ |
(8,967 |
) |
Adjustments to reconcile to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
74,376 |
|
|
|
63,588 |
|
Amortization of debt issuance costs |
|
2,922 |
|
|
|
2,420 |
|
Stock-based compensation |
|
5,233 |
|
|
|
7,940 |
|
Compensation expense related to employee share purchases |
|
— |
|
|
|
427 |
|
Deferred income taxes |
|
(6,649 |
) |
|
|
(8,028 |
) |
Change in fair value of earnout liabilities |
|
988 |
|
|
|
(758 |
) |
(Gain) loss on sale of rental equipment |
|
(2,813 |
) |
|
|
(2,675 |
) |
(Gain) loss on sale of property, plant and equipment |
|
(61 |
) |
|
|
294 |
|
Charge for step-up of acquired inventory |
|
2,882 |
|
|
|
3,582 |
|
Net realizable value adjustment and write-offs for obsolete and excess inventory |
|
6,612 |
|
|
|
8,990 |
|
Bad debt expense |
|
863 |
|
|
|
784 |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
Accounts receivable |
|
(1,423 |
) |
|
|
18,020 |
|
Inventories |
|
(9,227 |
) |
|
|
(1,236 |
) |
Prepaid expenses and other current assets |
|
(869 |
) |
|
|
931 |
|
Accounts payable |
|
11,338 |
|
|
|
3,048 |
|
Accrued expenses and other current liabilities |
|
(21,254 |
) |
|
|
13,667 |
|
Other changes in operating assets and liabilities |
|
867 |
|
|
|
259 |
|
Net cash provided by (used in) operating activities |
|
56,453 |
|
|
|
102,286 |
|
Investing activities |
|
|
|
||||
Purchases of property, plant and equipment |
|
(13,684 |
) |
|
|
(15,337 |
) |
Proceeds from sale of property, plant and equipment |
|
3,662 |
|
|
|
— |
|
Business acquisitions, net of cash acquired |
|
(199,423 |
) |
|
|
(259,835 |
) |
Asset acquisitions |
|
(15,853 |
) |
|
|
— |
|
Purchases of rental equipment |
|
(9,509 |
) |
|
|
(9,341 |
) |
Proceeds from sale of rental equipment |
|
5,124 |
|
|
|
5,990 |
|
Net cash provided by (used in) investing activities |
|
(229,683 |
) |
|
|
(278,523 |
) |
Financing activities |
|
|
|
||||
Proceeds from revolving lines of credit |
|
211,599 |
|
|
|
180,982 |
|
Payments on revolving lines of credit |
|
(213,634 |
) |
|
|
(302,083 |
) |
Proceeds from term loans |
|
200,000 |
|
|
|
305,000 |
|
Payments on term loans |
|
(32,750 |
) |
|
|
(26,375 |
) |
Deferred financing costs |
|
(2,064 |
) |
|
|
(3,419 |
) |
Proceeds from rights offering, net of offering costs of $1,531 |
|
— |
|
|
|
98,469 |
|
Repurchase of common stock |
|
(2,580 |
) |
|
|
(3,619 |
) |
Shares repurchased held in treasury |
|
(617 |
) |
|
|
(287 |
) |
Proceeds from employees for share purchases |
|
— |
|
|
|
3,253 |
|
Payment of financing lease principal |
|
(653 |
) |
|
|
(515 |
) |
Payment of earnout |
|
— |
|
|
|
(1,000 |
) |
Net cash provided by (used in) financing activities |
|
159,301 |
|
|
|
250,406 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(3,971 |
) |
|
|
717 |
|
Increase (decrease) in cash, cash equivalents and restricted cash |
|
(17,900 |
) |
|
|
74,886 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
99,626 |
|
|
|
24,740 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
81,726 |
|
|
$ |
99,626 |
|
Cash and cash equivalents |
$ |
66,479 |
|
|
$ |
83,931 |
|
Restricted cash |
|
15,247 |
|
|
|
15,695 |
|
Total cash, cash equivalents and restricted cash |
$ |
81,726 |
|
|
$ |
99,626 |
|
Distribution Solutions Group, Inc. Segment Reporting |
||||||||||||||
| Change in Reportable Segments: In the third quarter of 2024, as a result of the Source Atlantic Limited ("Source Atlantic") acquisition, we realigned our reportable segments by adding a new segment with a focus on the Canadian MRO market. The new Canada Branch Division segment includes the results of Source Atlantic and Bolt Supply House ("Bolt"). The results of Bolt had previously been included in our All Other non-reportable segment prior to Q3 2024. The results of the Lawson, TestEquity and Gexpro Services reportable segments did not change. The segment realignment had no impact on our financial condition or results of operations. Prior period segment results have been recast to reflect our new reportable segments. | ||||||||||||||
Distribution Solutions Group, Inc. |
||||||||||||||
Table 1 - Selected Segment Financial Data |
||||||||||||||
(Dollars in thousands) |
||||||||||||||
(Unaudited) |
||||||||||||||
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
Twelve Months Ended |
||||||||||||
|
December 31, |
December 31, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
||||||||
Lawson Products |
$ |
111,783 |
|
|
$ |
109,807 |
|
$ |
469,044 |
|
|
$ |
468,711 |
|
Canada Branch Division |
|
59,041 |
|
|
|
13,236 |
|
|
125,099 |
|
|
|
55,890 |
|
Gexpro Services |
|
118,797 |
|
|
|
93,211 |
|
|
440,723 |
|
|
|
405,733 |
|
TestEquity |
|
191,306 |
|
|
|
190,685 |
|
|
771,180 |
|
|
|
641,768 |
|
Intersegment revenue elimination |
|
(464 |
) |
|
|
(1,700 |
) |
|
(1,942 |
) |
|
|
(1,700 |
) |
Total |
$ |
480,463 |
|
|
$ |
405,239 |
|
$ |
1,804,104 |
|
|
$ |
1,570,402 |
|
|
|
|
|
|
|
|
||||||||
Operating income (loss): |
|
|
|
|
|
|
||||||||
Lawson Products |
$ |
3,593 |
|
|
$ |
5,140 |
|
$ |
14,555 |
|
|
$ |
32,498 |
|
Canada Branch Division |
|
1,178 |
|
|
|
1,186 |
|
|
6,024 |
|
|
|
5,731 |
|
Gexpro Services |
|
11,437 |
|
|
|
3,516 |
|
|
36,533 |
|
|
|
27,000 |
|
TestEquity |
|
5,029 |
|
|
|
(8,282 |
) |
|
3,967 |
|
|
|
(16,465 |
) |
All Other |
|
(1,170 |
) |
|
|
(1,849 |
) |
|
(5,124 |
) |
|
|
(5,773 |
) |
Total |
$ |
20,067 |
|
|
$ |
(289 |
) |
$ |
55,955 |
|
|
$ |
42,991 |
|
DISTRIBUTION SOLUTIONS GROUP, INC. |
SEC REGULATION G GAAP RECONCILIATIONS |
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company's management believes that certain non-GAAP financial measures may provide users of this financial information with additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflections of underlying trends of the business because they provide a comparison of historical information that excludes certain non-operational or non-cash items that impact the overall comparability. See Tables below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2024 and 2023, the three months ended September 30, 2024, and for the years ended December 31, 2024 and 2023. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. |
Distribution Solutions Group, Inc. |
|||||||||||||||||||
Table 2 - Reconciliation of GAAP Net Income (Loss) and GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA |
|||||||||||||||||||
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||||
|
December 31, |
|
September 30, |
|
December 31, |
||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) |
$ |
(25,925 |
) |
|
$ |
(16,330 |
) |
|
$ |
21,921 |
|
|
$ |
(7,332 |
) |
|
$ |
(8,967 |
) |
Income tax expense (benefit) |
|
30,060 |
|
|
|
3,323 |
|
|
|
(19,007 |
) |
|
|
6,796 |
|
|
|
6,960 |
|
Other income (expense), net |
|
440 |
|
|
|
113 |
|
|
|
15 |
|
|
|
358 |
|
|
|
2,982 |
|
Change in fair value of earnout liabilities |
|
127 |
|
|
|
(112 |
) |
|
|
858 |
|
|
|
988 |
|
|
|
(758 |
) |
Interest expense |
|
15,365 |
|
|
|
12,717 |
|
|
|
15,160 |
|
|
|
55,145 |
|
|
|
42,774 |
|
Operating income (loss) |
|
20,067 |
|
|
|
(289 |
) |
|
|
18,947 |
|
|
|
55,955 |
|
|
|
42,991 |
|
Depreciation and amortization |
|
20,165 |
|
|
|
16,272 |
|
|
|
18,624 |
|
|
|
74,376 |
|
|
|
63,588 |
|
Stock-based compensation(1) |
|
910 |
|
|
|
2,499 |
|
|
|
2,432 |
|
|
|
5,233 |
|
|
|
7,940 |
|
Severance and acquisition related retention expenses(2) |
|
639 |
|
|
|
11,400 |
|
|
|
3,568 |
|
|
|
23,236 |
|
|
|
24,666 |
|
Acquisition related costs(3) |
|
1,689 |
|
|
|
2,498 |
|
|
|
2,901 |
|
|
|
10,142 |
|
|
|
11,561 |
|
Inventory step-up(4) |
|
1,122 |
|
|
|
716 |
|
|
|
1,126 |
|
|
|
2,882 |
|
|
|
3,582 |
|
Other non-recurring(5) |
|
307 |
|
|
|
784 |
|
|
|
1,512 |
|
|
|
3,433 |
|
|
|
2,708 |
|
Non-GAAP adjusted EBITDA |
$ |
44,899 |
|
|
$ |
33,880 |
|
|
$ |
49,110 |
|
|
$ |
175,257 |
|
|
$ |
157,036 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income (loss) as a percent of revenue |
|
4.2 |
% |
|
|
(0.1 |
)% |
|
|
4.0 |
% |
|
|
3.1 |
% |
|
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA as a percent of revenue |
|
9.3 |
% |
|
|
8.4 |
% |
|
|
10.5 |
% |
|
|
9.7 |
% |
|
|
10.0 |
% |
| (1) | Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price. |
|
| (2) | Includes severance expense for actions taken not related to a formal restructuring plan and acquisition related retention expenses for the Hisco and S&S Automotive acquisitions. |
|
| (3) | Transaction and integration costs related to acquisitions. |
|
| (4) | Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed. |
|
| (5) | Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items. |
Distribution Solutions Group, Inc. |
|||||||||||||||||||||||
Table 3 - Reconciliation of GAAP Net Income (Loss) and GAAP Diluted EPS to Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS |
|||||||||||||||||||||||
(Dollars in thousands, except per share data) |
|||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||
|
December 31, 2024 |
|
December 31, 2023(4) |
|
September 30, 2024 |
||||||||||||||||||
|
Amount |
|
Diluted
|
|
Amount |
|
Diluted
|
|
Amount |
|
Diluted
|
||||||||||||
Net income (loss) |
$ |
(25,925 |
) |
|
$ |
(0.55 |
) |
|
$ |
(16,330 |
) |
|
$ |
(0.35 |
) |
|
$ |
21,921 |
|
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pretax adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stock-based compensation |
|
910 |
|
|
|
0.02 |
|
|
|
2,499 |
|
|
|
0.05 |
|
|
|
2,432 |
|
|
|
0.05 |
|
Acquisition related costs |
|
1,689 |
|
|
|
0.04 |
|
|
|
2,498 |
|
|
|
0.05 |
|
|
|
2,901 |
|
|
|
0.06 |
|
Amortization of intangible assets |
|
12,559 |
|
|
|
0.27 |
|
|
|
10,398 |
|
|
|
0.22 |
|
|
|
11,972 |
|
|
|
0.25 |
|
Severance and acquisition related retention expenses |
|
639 |
|
|
|
0.01 |
|
|
|
11,400 |
|
|
|
0.24 |
|
|
|
3,568 |
|
|
|
0.08 |
|
Change in fair value of earnout liabilities |
|
127 |
|
|
|
— |
|
|
|
(112 |
) |
|
|
— |
|
|
|
858 |
|
|
|
0.02 |
|
Inventory step-up |
|
1,122 |
|
|
|
0.02 |
|
|
|
716 |
|
|
|
0.02 |
|
|
|
1,126 |
|
|
|
0.02 |
|
Other non-recurring |
|
307 |
|
|
|
0.01 |
|
|
|
784 |
|
|
|
0.02 |
|
|
|
1,512 |
|
|
|
0.03 |
|
Total pretax adjustments |
|
17,353 |
|
|
|
0.37 |
|
|
|
28,183 |
|
|
|
0.60 |
|
|
|
24,369 |
|
|
|
0.51 |
|
Tax effect on adjustments(1)/(3) |
|
2,054 |
|
|
|
0.04 |
|
|
|
(7,412 |
) |
|
|
(0.16 |
) |
|
|
(11,210 |
) |
|
|
(0.23 |
) |
Deferred tax asset valuation allowance(3)/(5) |
|
26,205 |
|
|
|
0.56 |
|
|
|
6,144 |
|
|
|
0.13 |
|
|
|
(17,425 |
) |
|
|
(0.37 |
) |
Non-GAAP adjusted net income |
$ |
19,687 |
|
|
$ |
0.42 |
|
|
$ |
10,585 |
|
|
$ |
0.22 |
|
|
$ |
17,655 |
|
|
$ |
0.37 |
|
| (1) | The adjustment to the income tax expense (benefit) is determined by excluding the non-GAAP adjustments by jurisdiction. |
|
| (2) | Pretax adjustments to diluted EPS calculated on 46.849 million, 46.805 million and 47.560 million diluted shares for the fourth quarter of 2024 and 2023,and the third quarter of 2024, respectively. |
|
| (3) | The quarter-to-date amounts are derived from the current period year-to-date amount less the previous quarter year-to-date amount. |
|
| (4) | Share and per share data for all periods presented reflect two-for-one stock split. |
|
| (5) | The estimated impact to the deferred tax asset valuation allowance from interest expense limitations under Section 163(j) determined by including the non-GAAP adjustments by jurisdiction. |
Distribution Solutions Group, Inc. |
|||||||||||||||
Table 4 - Reconciliation of GAAP Net Income (Loss) and GAAP Diluted EPS to Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS |
|||||||||||||||
(Dollars in thousands, except per share data) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
||||||||||||||
|
Twelve Months Ended |
||||||||||||||
|
December 31, 2024 |
|
December 31, 2023(3) |
||||||||||||
|
Amount |
|
Diluted EPS(2) |
|
Amount |
|
Diluted EPS(2) |
||||||||
Net income (loss) |
$ |
(7,332 |
) |
|
$ |
(0.16 |
) |
|
$ |
(8,967 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
||||||||
Pretax adjustments: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
5,233 |
|
|
|
0.11 |
|
|
|
7,940 |
|
|
|
0.18 |
|
Acquisition related costs |
|
10,142 |
|
|
|
0.22 |
|
|
|
11,561 |
|
|
|
0.26 |
|
Amortization of intangible assets |
|
47,483 |
|
|
|
1.01 |
|
|
|
40,263 |
|
|
|
0.90 |
|
Severance and acquisition related retention expenses |
|
23,236 |
|
|
|
0.50 |
|
|
|
24,666 |
|
|
|
0.55 |
|
Change in fair value of earnout liabilities |
|
988 |
|
|
|
0.02 |
|
|
|
(758 |
) |
|
|
(0.02 |
) |
Inventory step-up |
|
2,882 |
|
|
|
0.06 |
|
|
|
3,582 |
|
|
|
0.08 |
|
Other non-recurring |
|
3,433 |
|
|
|
0.07 |
|
|
|
2,708 |
|
|
|
0.06 |
|
Total pretax adjustments |
|
93,397 |
|
|
|
1.99 |
|
|
|
89,962 |
|
|
|
2.01 |
|
Tax effect on adjustments(1) |
|
(23,735 |
) |
|
|
(0.51 |
) |
|
|
(23,660 |
) |
|
|
(0.53 |
) |
Deferred tax asset valuation allowance(4) |
|
5,674 |
|
|
|
0.12 |
|
|
|
6,144 |
|
|
|
0.14 |
|
Non-GAAP adjusted net income |
$ |
68,004 |
|
|
$ |
1.44 |
|
|
$ |
63,479 |
|
|
$ |
1.42 |
|
| (1) | The adjustment to the income tax expense (benefit) is determined by excluding the non-GAAP adjustments by jurisdiction. |
|
| (2) | Pretax adjustments to diluted EPS calculated on 46.811 million and 44.869 million diluted shares for the twelve months ended December 31, 2024 and 2023, respectively. |
|
| (3) | Share and per share data for all periods presented reflect two-for-one stock split. |
|
| (4) | The estimated impact to the deferred tax asset valuation allowance from interest expense limitations under Section 163(j) determined by including the non-GAAP adjustments by jurisdiction. |
Distribution Solutions Group, Inc. |
|||||||||||||||
Table 5 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted Operating Income |
|||||||||||||||
(Dollars in thousands) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
December 31, |
|
September 30, |
|
December 31, |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2024 |
|
|
2023 |
Operating income (loss) |
$ |
20,067 |
|
$ |
(289 |
) |
|
$ |
18,947 |
|
$ |
55,955 |
|
$ |
42,991 |
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit adjustments: |
|
|
|
|
|
|
|
|
|
||||||
Inventory step-up(1) |
|
1,122 |
|
|
716 |
|
|
|
1,126 |
|
|
2,882 |
|
|
3,582 |
Total gross profit adjustments |
|
1,122 |
|
|
716 |
|
|
|
1,126 |
|
|
2,882 |
|
|
3,582 |
|
|
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative expenses adjustments: |
|
|
|
|
|
|
|
|
|
||||||
Acquisition related costs(2) |
|
1,689 |
|
|
2,498 |
|
|
|
2,901 |
|
|
10,142 |
|
|
11,561 |
Amortization of intangible assets |
|
12,559 |
|
|
10,398 |
|
|
|
11,972 |
|
|
47,483 |
|
|
40,263 |
Stock-based compensation(3) |
|
910 |
|
|
2,499 |
|
|
|
2,432 |
|
|
5,233 |
|
|
7,940 |
Severance and acquisition related retention expenses(4) |
|
639 |
|
|
11,400 |
|
|
|
3,568 |
|
|
23,236 |
|
|
24,666 |
Other non-recurring(5) |
|
307 |
|
|
784 |
|
|
|
1,512 |
|
|
3,433 |
|
|
2,708 |
Total selling, general and administrative adjustments |
|
16,104 |
|
|
27,579 |
|
|
|
22,385 |
|
|
89,527 |
|
|
87,138 |
|
|
|
|
|
|
|
|
|
|
||||||
Total adjustments |
|
17,226 |
|
|
28,295 |
|
|
|
23,511 |
|
|
92,409 |
|
|
90,720 |
Non-GAAP adjusted operating income |
$ |
37,293 |
|
$ |
28,006 |
|
|
$ |
42,458 |
|
$ |
148,364 |
|
$ |
133,711 |
| (1) | Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed. |
|
| (2) | Transaction and integration costs related to acquisitions. |
|
| (3) | Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price. |
|
| (4) | Includes severance expense for actions taken not related to a formal restructuring plan and acquisition related retention expenses for the Hisco and S&S Automotive acquisitions. |
|
| (5) | Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items. |
Distribution Solutions Group, Inc. |
||||||||||||||||||||||||||||||||||||||||||||||||
Table 6 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA |
||||||||||||||||||||||||||||||||||||||||||||||||
Q4 2024 and Q4 2023 |
||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
Lawson Products |
|
Gexpro Services |
|
TestEquity |
|
Canada Branch Division |
|
All Other |
|
Eliminations |
|
Consolidated DSG |
|||||||||||||||||||||||||||||||||||
Quarter Ended |
Q4
|
Q4
|
|
Q4
|
Q4
|
|
Q4
|
Q4
|
|
Q4
|
Q4
|
|
Q4
|
Q4
|
|
Q4
|
Q4
|
|
Q4
|
Q4
|
||||||||||||||||||||||||||||
Revenue from external customers |
$ |
111,772 |
|
$ |
109,475 |
|
|
$ |
118,505 |
|
$ |
91,968 |
|
|
$ |
191,145 |
|
$ |
190,560 |
|
|
$ |
59,041 |
|
$ |
13,236 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
480,463 |
|
$ |
405,239 |
|
Intersegment revenue |
|
11 |
|
|
332 |
|
|
|
292 |
|
|
1,243 |
|
|
|
161 |
|
|
125 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(464 |
) |
|
(1,700 |
) |
|
|
— |
|
|
— |
|
Revenue |
$ |
111,783 |
|
$ |
109,807 |
|
|
$ |
118,797 |
|
$ |
93,211 |
|
|
$ |
191,306 |
|
$ |
190,685 |
|
|
$ |
59,041 |
|
$ |
13,236 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
(464 |
) |
$ |
(1,700 |
) |
|
$ |
480,463 |
|
$ |
405,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Operating income (loss) |
$ |
3,593 |
|
$ |
5,140 |
|
|
$ |
11,437 |
|
$ |
3,516 |
|
|
$ |
5,029 |
|
$ |
(8,282 |
) |
|
$ |
1,178 |
|
$ |
1,186 |
|
|
$ |
(1,170 |
) |
$ |
(1,849 |
) |
|
|
|
|
$ |
20,067 |
|
$ |
(289 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Depreciation and amortization |
|
6,218 |
|
|
4,407 |
|
|
|
3,984 |
|
|
4,026 |
|
|
|
8,048 |
|
|
7,315 |
|
|
|
1,915 |
|
|
524 |
|
|
|
— |
|
|
— |
|
|
|
|
|
|
20,165 |
|
|
16,272 |
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Acquisition related costs(1) |
|
369 |
|
|
360 |
|
|
|
584 |
|
|
268 |
|
|
|
713 |
|
|
931 |
|
|
|
23 |
|
|
— |
|
|
|
— |
|
|
939 |
|
|
|
|
|
|
1,689 |
|
|
2,498 |
|
||||
Stock-based compensation(2) |
|
544 |
|
|
2,499 |
|
|
|
— |
|
|
— |
|
|
|
208 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
158 |
|
|
— |
|
|
|
|
|
|
910 |
|
|
2,499 |
|
||||
Severance and acquisition related retention expenses(3) |
|
273 |
|
|
46 |
|
|
|
183 |
|
|
199 |
|
|
|
180 |
|
|
11,153 |
|
|
|
4 |
|
|
2 |
|
|
|
(1 |
) |
|
— |
|
|
|
|
|
|
639 |
|
|
11,400 |
|
||||
Inventory step-up(4) |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
716 |
|
|
|
1,122 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
|
|
1,122 |
|
|
716 |
|
||||
Other non-recurring(5) |
|
— |
|
|
(30 |
) |
|
|
(360 |
) |
|
814 |
|
|
|
667 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
|
|
307 |
|
|
784 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Non-GAAP adjusted EBITDA |
$ |
10,997 |
|
$ |
12,422 |
|
|
$ |
15,828 |
|
$ |
8,823 |
|
|
$ |
14,845 |
|
$ |
11,833 |
|
|
$ |
4,242 |
|
$ |
1,712 |
|
|
$ |
(1,013 |
) |
$ |
(910 |
) |
|
|
|
|
$ |
44,899 |
|
$ |
33,880 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Operating income (loss) as a percent of revenue |
|
3.2 |
% |
|
4.7 |
% |
|
|
9.6 |
% |
|
3.8 |
% |
|
|
2.6 |
% |
|
(4.3 |
)% |
|
|
2.0 |
% |
|
9.0 |
% |
|
|
N/M |
|
|
N/M |
|
|
|
|
|
|
4.2 |
% |
|
(0.1 |
)% |
||||
Adjusted EBITDA as a percent of revenue |
|
9.8 |
% |
|
11.3 |
% |
|
|
13.3 |
% |
|
9.5 |
% |
|
|
7.8 |
% |
|
6.2 |
% |
|
|
7.2 |
% |
|
12.9 |
% |
|
|
N/M |
|
|
N/M |
|
|
|
|
|
|
9.3 |
% |
|
8.4 |
% |
||||
| (1) | Transaction and integration costs related to acquisitions. |
|
| (2) | Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price. |
|
| (3) | Includes severance expense from actions taken not related to a formal restructuring plan and acquisition related retention expenses. |
|
| (4) | Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed. |
|
| (5) | Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items. |
|
N/M - Not meaningful |
||
Distribution Solutions Group, Inc. |
||||||||||||||||||||||||||||||||||||||||||||||||
Table 7 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA |
||||||||||||||||||||||||||||||||||||||||||||||||
YTD 2024 and 2023 |
||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
Lawson Products |
|
Gexpro Services |
|
TestEquity |
|
Canada Branch Division |
|
Other |
|
Eliminations |
|
Consolidated DSG |
|||||||||||||||||||||||||||||||||||
Year Ended |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Revenue from external customers |
$ |
468,976 |
|
$ |
468,379 |
|
|
$ |
439,163 |
|
$ |
404,490 |
|
|
$ |
770,866 |
|
$ |
641,643 |
|
|
$ |
125,099 |
|
$ |
55,890 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
1,804,104 |
|
$ |
1,570,402 |
|
Intersegment revenue |
|
68 |
|
|
332 |
|
|
|
1,560 |
|
|
1,243 |
|
|
|
314 |
|
|
125 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(1,942 |
) |
|
(1,700 |
) |
|
|
— |
|
|
— |
|
Revenue |
$ |
469,044 |
|
$ |
468,711 |
|
|
$ |
440,723 |
|
$ |
405,733 |
|
|
$ |
771,180 |
|
$ |
641,768 |
|
|
$ |
125,099 |
|
$ |
55,890 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
(1,942 |
) |
$ |
(1,700 |
) |
|
$ |
1,804,104 |
|
$ |
1,570,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Operating income (loss) |
$ |
14,555 |
|
$ |
32,498 |
|
|
$ |
36,533 |
|
$ |
27,000 |
|
|
$ |
3,967 |
|
$ |
(16,465 |
) |
|
$ |
6,024 |
|
$ |
5,731 |
|
|
$ |
(5,124 |
) |
$ |
(5,773 |
) |
|
|
|
|
$ |
55,955 |
|
$ |
42,991 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Depreciation and amortization |
|
24,349 |
|
|
19,532 |
|
|
|
15,489 |
|
|
15,986 |
|
|
|
30,799 |
|
|
26,002 |
|
|
|
3,739 |
|
|
2,068 |
|
|
|
— |
|
|
— |
|
|
|
|
|
|
74,376 |
|
|
63,588 |
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Acquisition related costs(1) |
|
7,023 |
|
|
3,015 |
|
|
|
1,501 |
|
|
1,081 |
|
|
|
2,251 |
|
|
6,215 |
|
|
|
23 |
|
|
— |
|
|
|
(656 |
) |
|
1,250 |
|
|
|
|
|
|
10,142 |
|
|
11,561 |
|
||||
Stock-based compensation(2) |
|
4,132 |
|
|
7,940 |
|
|
|
— |
|
|
— |
|
|
|
433 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
668 |
|
|
— |
|
|
|
|
|
|
5,233 |
|
|
7,940 |
|
||||
Severance and acquisition related retention expenses (3) |
|
4,937 |
|
|
476 |
|
|
|
460 |
|
|
238 |
|
|
|
17,791 |
|
|
23,949 |
|
|
|
49 |
|
|
3 |
|
|
|
(1 |
) |
|
— |
|
|
|
|
|
|
23,236 |
|
|
24,666 |
|
||||
Inventory step-up(4) |
|
1,066 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
3,582 |
|
|
|
1,816 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
|
|
2,882 |
|
|
3,582 |
|
||||
Other non-recurring(5) |
|
337 |
|
|
202 |
|
|
|
1,792 |
|
|
886 |
|
|
|
1,047 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
257 |
|
|
1,620 |
|
|
|
|
|
|
3,433 |
|
|
2,708 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Non-GAAP adjusted EBITDA |
$ |
56,399 |
|
$ |
63,663 |
|
|
$ |
55,775 |
|
$ |
45,191 |
|
|
$ |
56,288 |
|
$ |
43,283 |
|
|
$ |
11,651 |
|
$ |
7,802 |
|
|
$ |
(4,856 |
) |
$ |
(2,903 |
) |
|
|
|
|
$ |
175,257 |
|
$ |
157,036 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Operating income (loss) as a percent of revenue |
|
3.1 |
% |
|
6.9 |
% |
|
|
8.3 |
% |
|
6.7 |
% |
|
|
0.5 |
% |
|
(2.6 |
)% |
|
|
4.8 |
% |
|
10.3 |
% |
|
|
N/M |
|
|
N/M |
|
|
|
|
|
|
3.1 |
% |
|
2.7 |
% |
||||
Adjusted EBITDA as a percent of revenue |
|
12.0 |
% |
|
13.6 |
% |
|
|
12.7 |
% |
|
11.1 |
% |
|
|
7.3 |
% |
|
6.7 |
% |
|
|
9.3 |
% |
|
14.0 |
% |
|
|
N/M |
|
|
N/M |
|
|
|
|
|
|
9.7 |
% |
|
10.0 |
% |
||||
| (1) | Transaction and integration costs related to acquisitions. |
|
| (2) | Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price. |
|
| (3) | Includes severance expense from actions taken not related to a formal restructuring plan and acquisition related retention expenses. |
|
| (4) | Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed. |
|
| (5) | Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items. |
|
N/M - Not meaningful |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250305282854/en/
Contacts
Company:
Distribution Solutions Group, Inc.
Ronald J. Knutson
Executive Vice President, Chief Financial Officer and Treasurer
1-888-611-9888
Investor Relations:
Three Part Advisors, LLC
Steven Hooser / Sandy Martin
214-872-2710 / 214-616-2207