Distribution Solutions Group (DSGR) came out with quarterly earnings of $0.31 per share, missing the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $0.25 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -13.89%. A quarter ago, it was expected that this industrial products and tools maker would post earnings of $0.33 per share when it actually produced earnings of $0.42, delivering a surprise of 27.27% ...

Distribution Solutions Group (DSGR) Q1 2025 Earnings Call May 01, 2025 09:00 AM ET Speaker0 and welcome to the Distribution Solutions Group First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode and a question and answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Stephen Hoosier of Investor Relations. Sir, you may begin. Speaker1 Good morning, a ...

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 March 31, 2025 or (Exact name of registrant as specified in its charter) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 36-2229304 For the transition period from to 301 Commerce Street, Suite 1700, Fort Worth, Texas 76102 Commission file Number: ...

Distribution Solutions Group Announces 2025 First Quarter Results First Quarter Revenues Up 14.9%, Consolidated Organic Average Daily Sales Up 4.3% FORT WORTH, TEXAS, May 1, 2025 - Distribution Solutions Group, Inc. (NASDAQ:DSGR) ("DSG" or the "Company"), a premier specialty distribution company, today announced consolidated results for the first quarter ended March 31, 2025. This press release is supplemented by an earnings presentation at https://investor.distributionsolutionsgroup.com/news/events. The fo ...

NASDAQ: DSGR Q1 2025 Financial Results May 1, 2025 Safe Harbor Statement Cautionary Note Regarding Forward-Looking Statements This presentation 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," "contemp ...

Financial Data and Key Metrics Changes - The company reported revenue of $1.8 billion for fiscal 2024, an increase of almost 15%, primarily driven by strategic acquisitions [8] - Adjusted free cash flow grew to $175 million, reflecting strong operational performance [8] - The trailing twelve-month total revenues were approximately $1.95 billion, indicating significant growth since the 2021 pre-merger results [10] Business Line Data and Key Metrics Changes - Lawson Products reported Q4 sales of $111.8 million, with organic sales down 10.9% due to lower rep counts and military sales decline [53] - Gexpro Services experienced a revenue increase of 27.4% year-over-year, reaching $118.8 million, driven by organic expansion [58] - Test Equity Group's sales were $191.3 million, with adjusted EBITDA of $14.8 million, reflecting a positive growth trajectory in test and measurement [60] Market Data and Key Metrics Changes - The aerospace and defense, technology, and renewables markets showed sequential growth, contributing to Gexpro Services' performance [34] - Military sales for Lawson were down over 50%, significantly impacting total sales [32] - The company noted improvements in market conditions, particularly in the OEM vertical, which is expected to enhance performance in 2025 [17] Company Strategy and Development Direction - The company is focused on strategic acquisitions to broaden scale and geographic footprint, with five acquisitions completed in 2024 [12] - Investments in sales force and technology are aimed at enhancing customer engagement and long-term profitability [19][24] - The company is prioritizing high-growth opportunities in Southeast Asia and integrating recent acquisitions to drive future growth [14][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged persistent macro headwinds but expressed confidence in the company's positioning for record performance in 2025 as market conditions improve [17] - The company is optimistic about the recovery in end markets and expects to see sales and margins build quickly as conditions normalize [46] - Management highlighted the importance of adapting to new regulatory environments and potential impacts from government spending [72] Other Important Information - The company ended Q4 with approximately $473 million in net working capital and $335 million in liquidity [61] - Debt leverage at the end of Q4 was 3.5 times, with a targeted range of three to four times [62] - The company repurchased $2.6 million of stock during fiscal 2024 as part of its capital allocation strategy [64] Q&A Session Summary Question: Can you provide insights on quarter-to-date sales levels across DSG compared to Q4? - Management indicated that Lawson has started strong in Q1, with sales up compared to the previous year, while consolidated sales are relatively flat [84][86] Question: How have consolidated margins trended in Q1 versus Q4? - Margins are expected to improve as 2025 develops, particularly with the realization of synergies from recent acquisitions [88][89] Question: Was the fourth quarter organic revenue growth of 3.5% a positive surprise? - Management noted that the fourth quarter was firmer than expected, reflecting better performance in several verticals [98][100] Question: What is the outlook for Lawson's margins moving through 2025? - Management expects gradual improvement in margins as investments in the sales force begin to yield results, despite challenges from military sales [106][114]

Distribution Solutions Group (DSGR) Q4 2024 Earnings Call March 06, 2025 09:00 AM ET Company Participants Steven Hooser - Partner, Senior MD & President - IDEAS Conferences​J. Bryan King - Chairman & CEORon Knutson - EVP & CFOZach Marriott - Research AssociateKevin Steinke - Managing Director Conference Call Participants Ken Newman - VP & Equity Research Analyst Operator Greetings. Welcome to the Distribution Solutions Group Fourth Quarter twenty twenty four Earnings Conference Call. At this time, all parti ...

Economic Indicators - DSG reported an average monthly Purchasing Managers Index (PMI) of 48.3 for the year ended December 31, 2024, compared to 47.1 in 2023 and 53.5 in 2022, indicating a slight contraction in the manufacturing sector[172]. - The average monthly PMI for 2024 indicates a slight improvement in economic conditions compared to 2023, which may influence future sales performance[172]. Revenue and Growth - Consolidated revenue for 2024 increased by $233.7 million to $1,804.1 million, primarily driven by $268.2 million from acquisitions, despite a decline in organic revenue of $34.5 million[202]. - Revenue for the year ended December 31, 2024, was $1,804,104, an increase of 14.8% from $1,570,402 in 2023[340]. - Lawson's revenue growth strategy focuses on increasing sales team productivity and expanding product offerings to existing customers while attracting new clients[174]. - The Canada Branch Division plans to grow revenue by increasing wallet share with existing customers and introducing new product lines in previously underserved geographic areas[181]. - Gexpro Services aims to increase revenue by expanding its customer base and leveraging recent acquisitions to enhance installation and aftermarket services[179]. Acquisitions - The company completed several acquisitions in 2024, including ConRes Test Equipment, Tech-Component Resources Pte Ltd, Source Atlantic Limited, S&S Automotive Inc., and Safety Supply Illinois LLC, to enhance its service offerings and market presence[164][166][167][168][169]. - TestEquity expanded its product offerings through the acquisition of HIS Company, Inc., which included adhesives, chemicals, and specialty materials, enhancing its competitive position in the market[177][187]. - The company acquired S&S Automotive Inc. and Source Atlantic Limited for a combined purchase price of approximately $183.2 million, net of cash acquired[325]. - The Canada Branch Division's revenue surged by $69.2 million, or 123.8%, to $125.1 million in 2024, primarily due to $70.3 million from the acquisition of Source Atlantic[223]. Financial Performance - Adjusted EBITDA for 2024 was $175.3 million, compared to $157.0 million in 2023, reflecting an increase of approximately 11.6%[195]. - Net income for 2024 was a loss of $7.3 million, an improvement from a loss of $8.97 million in 2023[201]. - Operating income for 2024 was $55.96 million, up from $42.99 million in 2023, indicating a growth of approximately 30%[201]. - The gross profit margin for 2024 was 34.0%, slightly down from 35.1% in 2023[201]. - Total cost of goods sold for 2024 was $1,190.3 million, representing 66.0% of total revenue, compared to 64.9% in 2023[201]. - Interest expense increased to $55.1 million in 2024 from $42.8 million in 2023, reflecting higher borrowing costs[201]. - Selling, general and administrative expenses were $557,820 in 2024, up from $508,884 in 2023, an increase of 9.6%[340]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $56.5 million for the year ended December 31, 2024, a decrease of $45.8 million from $102.3 million in 2023[294]. - Net cash used in investing activities was $229.7 million in 2024, primarily due to acquisitions and capital expenditures[295]. - The Company expects to spend approximately $20 million to $25 million for capital expenditures during 2025 to support ongoing operations[304]. Debt and Financing - DSG's debt amendment in August 2024 included a $200 million incremental term loan and a $55 million increase in the senior secured revolving credit facility, raising the total to $255 million[171]. - As of December 31, 2024, the Company had $739.9 million in outstanding borrowings under the Amended Credit Agreement and $253.0 million of borrowing availability remaining[301]. - A hypothetical increase/decrease in interest rates of 100 basis points would increase/decrease the Company's annual interest expense by approximately $7.4 million[315]. Segment Performance - Lawson segment revenue increased by $0.3 million, or 0.1%, to $469.0 million in 2024, driven by $39.8 million from acquisitions and $2.9 million from automotive sales, offset by a $42.4 million decline in core customer sales[205]. - TestEquity segment revenue increased by $129.4 million, or 20.2%, to $771.2 million in 2024, primarily due to $157.4 million from acquisitions, despite a $28.0 million decline in legacy revenue[211]. - Gexpro Services segment revenue increased by $35.0 million, or 8.6%, to $440.7 million in 2024, driven by increased sales in renewable energy, aerospace, and technology markets[217]. - Canada Branch Division revenue grew significantly to $125.1 million in 2024, up from $55.9 million in 2023[201]. Stock and Shareholder Actions - The Board of Directors increased the stock repurchase program by $25.0 million in December 2023, bringing the total authorized to $37.5 million[305]. - During 2024, the Company repurchased 85,644 shares of common stock at an average cost of $30.13 per share for a total cost of $2.6 million[306]. - The company completed a two-for-one stock split in August 2023, impacting the share data presented[338]. Tax and Other Income - Income tax expense for 2024 was $6.8 million, with an effective tax rate of (1,267.9)%, compared to $7.0 million and (346.8)% in 2023[231]. - Other income (expense), net changed by $2.6 million in 2024 compared to 2023, influenced by favorable interest income and foreign currency exchange rate changes[230]. Segment Realignment - The company realigned its reportable segments to four: Lawson, TestEquity, Gexpro Services, and Canada Branch Division, effective from Q3 2024[353]. - The Canada Branch Division now includes results from Bolt and Source Atlantic, acquired in Q3 2024[354].

Revenue Performance - Full year revenue increased by 14.9% to $1.80 billion, with organic revenue decreasing by 2.6% compared to 2023[7] - Fourth quarter revenue was $480.5 million, an increase of 18.6% year-over-year, including $61.0 million from acquisitions[7] - Revenue for Q4 2024 reached $480.5 million, a 18.6% increase from $405.2 million in Q4 2023[44] - For the year ended 2024, total revenue was $1.8 billion, a 14.8% increase from $1.57 billion in 2023[48] Profitability Metrics - Adjusted EBITDA for the full year grew to $175.3 million, or 9.7% of revenue, compared to $157.0 million, or 10.0% of revenue in the prior year[7] - Fourth quarter adjusted operating income was $37.3 million, compared to $28.0 million in the year-ago quarter[7] - Non-GAAP adjusted EBITDA for Q4 2024 was $44.9 million, up from $33.9 million in Q4 2023, representing a 32.5% increase[44] - Adjusted EBITDA for the year 2024 was $175.3 million, up from $157.0 million in 2023, reflecting an increase of 11.6%[48] Operating Income - Operating income for the full year increased by 30.2% to $56.0 million, net of $47.5 million in acquired intangible amortization[7] - Operating income for Q4 2024 was $20,067 thousand, compared to a loss of $289 thousand in Q4 2023[20] - The company reported an operating income of $56.0 million for the year 2024, compared to $43.0 million in 2023[48] - The operating income as a percentage of revenue for 2024 was 3.1%, compared to 2.7% in 2023[48] Net Income and Loss - Diluted loss per share for the year was $0.16, compared to $0.20 in the previous year, while non-GAAP adjusted diluted earnings per share was $1.44[7] - Net loss for the twelve months ended December 31, 2024, was $7,332 thousand, an improvement from a loss of $8,967 thousand in 2023[23] - The company reported a basic loss per share of $0.55 for Q4 2024, compared to a loss of $0.35 in Q4 2023[20] - For the three months ended December 31, 2024, the net loss was $25,925,000 compared to a net loss of $16,330,000 for the same period in 2023[31] Cash Flow and Liquidity - Cash generated from operations for the full year was $56.5 million, with $101.2 million excluding non-recurring acquisition-related costs[7] - The company expanded its credit facility by $255 million, ending the year with total liquidity of $334.7 million[7] - Cash and cash equivalents decreased to $66,479 thousand in 2024 from $83,931 thousand in 2023, a decline of 20.9%[18] Acquisitions and Strategic Initiatives - The company completed five strategic acquisitions in 2024, deploying approximately $216.0 million in capital[4] - Business acquisitions in 2024 totaled $199,423 thousand, compared to $259,835 thousand in 2023, indicating a decrease of 23.2%[23] - The company remains focused on long-term value creation through organic growth and strategic M&A in the industrial distribution sector[5] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[44] Balance Sheet Highlights - Total assets increased to $1,727,255 thousand in 2024 from $1,550,331 thousand in 2023, representing an increase of 11.4%[18] - Total liabilities rose to $1,086,712 thousand in 2024, up from $888,730 thousand in 2023, marking an increase of 22.3%[18] Other Financial Metrics - Interest expense for the twelve months ended December 31, 2024, was $55,145,000, compared to $42,774,000 in 2023, reflecting an increase of approximately 28.8%[31] - The company incurred $10,142,000 in acquisition-related costs for the twelve months ended December 31, 2024, down from $11,561,000 in 2023[37] - The company reported a total of $93,397,000 in pretax adjustments for the twelve months ended December 31, 2024, compared to $89,962,000 in 2023[37] - Stock-based compensation expenses for 2024 totaled $5.2 million, a decrease from $7.9 million in 2023[48]

Financial Data and Key Metrics Changes - The company reported record quarterly sales of $468 million, an increase of 6.6% compared to the previous year's third quarter, driven by $38.1 million from acquisitions [53][7] - Organic sales declined by 2.1% year-over-year but improved by 0.2% sequentially from the second to the third quarter [54][12] - Adjusted EBITDA for the quarter was $49.1 million, representing a 12.4% increase over the prior year and an adjusted EBITDA margin of 10.5%, up 50 basis points year-over-year [55][13] - GAAP diluted income per share was $0.46, compared to a loss per share of $0.30 in the year-ago quarter [57] Business Line Data and Key Metrics Changes - Lawson's sales were $118 million, with organic average daily sales down 10% due to lower sales rep counts and federal government ordering process changes [58][60] - The new Canada Branch segment, which includes Source Atlantic, generated $39.1 million in sales, with $24.7 million from the Source Atlantic acquisition [62] - Gexpro Services saw a 12.5% increase in average daily organic sales, driven by recovery in key end markets such as technology and renewables [64][44] - TestEquity Group reported sales of $195.2 million, with a decline in daily sales of 7.4% due to headwinds in the electronics assembly market [66] Market Data and Key Metrics Changes - The company noted a continued lackluster industrial backdrop but highlighted strong performance in renewables, technology, and aerospace and defense markets [7][44] - The aerospace and defense market has shown strong performance, with technology sales nearly doubling compared to the same quarter last year [88][87] - The company is optimistic about recovery in key OEM end markets and improving demand in Test & Measurement categories [77][78] Company Strategy and Development Direction - The company is focused on integrating acquisitions and enhancing customer intimacy while managing costs to improve operating leverage [17][19] - A disciplined capital allocation strategy is in place, with a robust pipeline of acquisition opportunities to drive long-term growth [82][19] - The company aims to expand its market potential through strategic acquisitions and by enhancing its sales force capabilities [80][81] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in certain end markets and the potential for improved sales and margins as macroeconomic pressures ease [78][79] - The company is preparing for potential choppiness in demand but is encouraged by early signs of recovery in key markets [77][78] - Management emphasized the importance of maintaining a disciplined approach to cost management and capital allocation to drive shareholder value [81][82] Other Important Information - The company ended the quarter with approximately $498 million in net working capital and $328 million in liquidity, including $76 million in cash [68] - The leverage ratio at the end of Q3 was 3.7 times, within the target range of 3 to 4 times [70] - The company has a trailing 12-month free cash flow conversion of approximately 90%, resulting in a return on invested capital (ROIC) of approximately 10% [71] Q&A Session Summary Question: Insights on Gexpro's revenue recovery - Management noted that end markets such as renewables and semiconductors are showing improvement, contributing to Gexpro's revenue growth [85][88] Question: Fourth quarter pacing and margin expectations - Sales levels are consistent with Q3, and management expects to maintain double-digit EBITDA margins despite fewer selling days [90][91] Question: New sales territories in Lawson - The majority of the 130 new sales territories are new markets where the company anticipates success, with a goal of increasing the sales rep count to 1,000 by mid-next year [92][96] Question: Path to improving return on invested capital - Management discussed the impact of acquisitions on ROIC and the expectation of improved returns as the company integrates these acquisitions and realizes synergies [104][106]