| --- | --- | --- | --- | |------------------|-------|-------|-------| | | | | | | | | | | | | | | | | NASDAQ: DSGR | | | | | Q3 2024 Financial Results | | | | | October 31, 2024 | | | | 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 Pr ...

分组1 - Distribution Solutions Group (DSGR) reported quarterly earnings of $0.37 per share, missing the Zacks Consensus Estimate of $0.40 per share, but showing an increase from $0.17 per share a year ago, resulting in an earnings surprise of -7.50% [1] - The company posted revenues of $468.02 million for the quarter ended September 2024, which was 0.38% below the Zacks Consensus Estimate and an increase from $438.91 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped revenue estimates just once [2] 分组2 - Distribution Solutions shares have increased approximately 27.5% since the beginning of the year, outperforming the S&P 500's gain of 21.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.33 on revenues of $465.2 million, and for the current fiscal year, it is $1.43 on revenues of $1.79 billion [7] - The Zacks Industry Rank indicates that the Technology Services sector is in the top 23% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this industry [8]

Acquisitions - DSG completed the acquisition of Source Atlantic Limited on August 14, 2024, to expand its operating footprint in the Canadian market [139]. - The company acquired S&S Automotive Inc. on May 1, 2024, to enhance Lawson's services and products in the automotive market [140]. - The company completed several acquisitions in 2024, contributing significantly to revenue growth and operational performance [174]. - Revenue increased by $25.5 million, or 188.7%, to $39.1 million in Q3 2024 compared to $13.5 million in Q3 2023, driven by $24.7 million from the acquisition of Source Atlantic [199]. - Revenue for the Canada Branch increased by $23.4 million, or 54.9%, to $66.1 million in the first nine months of 2024, primarily due to the acquisition of Source Atlantic [239]. - Selling, general and administrative expenses rose by $5.8 million to $19.3 million in the first nine months of 2024, with approximately $5.4 million attributed to the Source Atlantic acquisition [241]. - Adjusted EBITDA for the Canada Branch Division was $7.4 million, an increase of $1.3 million from the same period a year ago, driven by the Source Atlantic acquisition [242]. Financial Performance - Consolidated net income for the three months ended September 30, 2024, was $21,921,000, compared to a net loss of $1,568,000 for the same period in 2023 [167]. - Adjusted EBITDA for the three months ended September 30, 2024, was $49,110,000, an increase from $43,703,000 in the same period of 2023, reflecting a year-over-year growth of approximately 12.5% [168]. - Operating income for the three months ended September 30, 2024, was $18,947,000, compared to $12,783,000 for the same period in 2023, indicating a significant improvement [167]. - For the nine months ended September 30, 2024, consolidated net income was $18,593,000, compared to a net loss of $3,954,000 for the same period in 2023 [170]. - Total revenue for the nine months ended September 30, 2024, reached $130,358,000, compared to $123,156,000 for the same period in 2023, showing a growth of approximately 5.7% [171]. - Adjusted EBITDA for the first nine months of 2024 was $45.4 million, a decrease of $5.8 million from the same period a year ago [220]. - The company experienced a net income of $18.6 million in the first nine months of 2024, compared to a net income of $7.4 million in the same period of 2023 [210]. Revenue and Profitability - Consolidated revenue increased by $29.1 million, or 6.6%, to $468.0 million in Q3 2024 compared to Q3 2023, driven by $38.1 million from acquisitions and offset by a decline in organic revenue of $9.0 million, or 2.1% [174]. - Gross profit increased to $158.8 million, representing a gross profit margin of 33.9%, compared to $145.3 million and 33.1% in the prior year [174]. - Selling, general and administrative expenses rose by $7.4 million to $139.9 million, accounting for 29.9% of total revenue, compared to 30.2% in the prior year [174]. - TestEquity's revenue decreased by $12.4 million, or 6.0%, to $195.2 million in Q3 2024, primarily due to a slowdown in the electronics assembly market [185]. - Lawson's revenue increased by $3.5 million, or 3.0%, to $118.0 million, driven by $13.4 million from acquisitions, despite a decline in sales to core customers [178]. - Gexpro Services reported a revenue increase of $12.9 million, or 12.5%, to $116.1 million, primarily due to increased sales in the renewable energy vertical market [192]. - Gross profit margin decreased to 32.1% in Q3 2024 from 43.6% in the prior year quarter, attributed to the lower margin profile of Source Atlantic [200]. Expenses and Costs - The company reported a significant increase in severance and acquisition-related retention expenses, totaling $22,597,000 for the nine months ended September 30, 2024, compared to $10,478,000 in the same period of 2023 [170]. - Interest expense for the three months ended September 30, 2024, was $15,160,000, up from $12,895,000 in the same period of 2023, representing an increase of approximately 17.6% [168]. - Selling, general and administrative expenses increased by $9.8 million to $185.8 million in the first nine months of 2024, driven by acquisitions and higher severance costs [219]. - Interest expense increased by $9.7 million in the first nine months of 2024, primarily due to higher interest rates and increased borrowings related to acquisitions [245]. Cash Flow and Financing - Net cash provided by operating activities was $10.7 million for the nine months ended September 30, 2024, a decrease of $63.3 million compared to $74.1 million in the same period of 2023 [251]. - Net cash used in investing activities was $205.4 million for the nine months ended September 30, 2024, primarily due to acquisitions and capital expenditures [255]. - Net cash provided by financing activities was $171.9 million for the nine months ended September 30, 2024, primarily from borrowings under the credit facility [257]. - As of September 30, 2024, the company had $61.3 million in cash and cash equivalents, down from $83.9 million on December 31, 2023 [249]. - The company had contractual commitments to purchase approximately $178.8 million of products from suppliers and contractors over the next twelve months [264]. - 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 during the first nine months of 2024 [267]. Strategic Initiatives - DSG plans to grow organically by exploring new channels to reach customers and expanding digital capabilities across its platform [144]. - The company aims to increase revenue through customer-led geographic expansion and leveraging its portfolio of recent acquisitions in Gexpro Services [153]. - The company is focusing on market expansion and new product development as part of its strategic initiatives for future growth [172].

Revenue and Income - Revenue for Q3 2024 increased by $29.1 million, or 6.6%, to $468.0 million, including $38.1 million from three acquisitions closed in 2024[5] - Operating income was $18.9 million, compared to $12.8 million in the prior year quarter, with adjusted operating income at $42.5 million, up from $38.0 million year-over-year[6] - Adjusted EBITDA for the quarter grew by 12.4% to $49.1 million, representing a margin of 10.5%, compared to 10.0% in the prior year quarter[8] - Revenue for the three months ended September 30, 2024, increased to $468,019 thousand, up 6.3% from $438,909 thousand in the same period last year[20] - Total revenue for Q3 2024 was $468,019,000, an increase of 6.6% compared to $438,909,000 in Q3 2023[25] - Operating income for Q3 2024 was $18,947,000, compared to $12,783,000 in Q3 2023, representing a year-over-year increase of 48.1%[25] - Non-GAAP adjusted EBITDA for Q3 2024 was $49,110,000, up from $43,703,000 in Q3 2023, indicating a growth of 12.4%[28] - Non-GAAP adjusted net income for Q3 2024 was $17,655,000, compared to $16,526,000 in Q3 2023, reflecting an increase of 6.8%[30] - The company reported a net income of $21,921,000 for Q3 2024, a significant recovery from a net loss of $1,568,000 in Q3 2023[30] Sales Performance - Average daily sales for Lawson increased by 1.4%, Gexpro Services by 12.5%, while TestEquity saw a decline of 7.4%[3] - Organic sales declined by 2.1% year-over-year but grew slightly by 0.2% sequentially over Q2 2024[5] - The Canada Branch Division generated revenue of $39,092,000 in Q3 2024, significantly up from $13,543,000 in Q3 2023, reflecting a growth of 188.5%[25] Acquisitions and Investments - The acquisition of Source Atlantic, with CAD $250 million in revenue, aims to enhance DSG's growth in the Canadian MRO market[4] - The acquisition of Source Atlantic Limited led to the establishment of a new reportable segment focused on the Canadian MRO market[24] - DSG remains focused on deploying capital for acquisitions and organic investments to maximize long-term shareholder value[5] Financial Position - The company expanded its credit facility by $255 million, ending the quarter with total liquidity of $328.0 million[9] - Total current assets increased to $770,712 thousand as of September 30, 2024, from $657,330 thousand at the end of 2023, marking a 17.2% growth[19] - Accounts receivable rose to $281,142 thousand, up 31.7% from $213,449 thousand at the end of 2023[19] - Long-term debt increased to $704,135 thousand, up 31.4% from $535,881 thousand at the end of 2023[19] - Cash and cash equivalents decreased to $61,344 thousand from $83,931 thousand at the end of 2023, a decline of 26.9%[19] - Total liabilities increased to $1,104,180 thousand as of September 30, 2024, from $888,730 thousand at the end of 2023, reflecting a 24.3% rise[19] - The company’s total assets reached $1,784,942 thousand as of September 30, 2024, compared to $1,550,331 thousand at the end of 2023, an increase of 15.1%[19] Earnings Per Share - Diluted income per share was $0.46, including a $0.40 tax benefit, compared to a diluted loss per share of $0.03 in the year-ago quarter[7] - The company reported a basic income per share of $0.47 for the three months ended September 30, 2024, compared to a loss of $0.03 in the same period last year[20] Expenses - The company incurred $3,568,000 in severance and acquisition-related retention expenses in Q3 2024, down from $10,478,000 in Q3 2023[32] - The company’s interest expense for Q3 2024 was $15,160,000, compared to $12,895,000 in Q3 2023, reflecting an increase of 17.6%[28]

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment opportunities Company Summaries - **Rent the Runway, Inc. (RENT)**: The Zacks Consensus Estimate for its current year earnings has increased by 14.1% over the last 60 days [1] - **Distribution Solutions Group, Inc. (DSGR)**: The Zacks Consensus Estimate for its current year earnings has increased by 11.7% over the last 60 days [1] - **Peloton Interactive, Inc. (PTON)**: The Zacks Consensus Estimate for its current year earnings has increased by 5.8% over the last 60 days [1] - **Enlivex Therapeutics Ltd. (ENLV)**: The Zacks Consensus Estimate for its current year earnings has increased by 13.6% over the last 60 days [1] - **Greenland Technologies Holding Corporation (GTEC)**: The Zacks Consensus Estimate for its current year earnings has increased significantly by 64.1% over the last 60 days [1]

Group 1 - Distribution Solutions Group (DSGR) is part of the Business Services sector, which includes 317 companies and is currently ranked 6 in the Zacks Sector Rank [2] - DSGR has a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperforming the market in the near term [3] - The Zacks Consensus Estimate for DSGR's full-year earnings has increased by 16.8% in the past quarter, reflecting improved analyst sentiment [4] Group 2 - DSGR has achieved a year-to-date return of 17.9%, outperforming the average return of 16.3% for the Business Services sector [4] - DSGR belongs to the Technology Services industry, which consists of 171 companies and is currently ranked 75 in the Zacks Industry Rank [6] - The Technology Services industry has an average year-to-date gain of 26.1%, indicating that DSGR is slightly underperforming its industry [6] Group 3 - SGS SA (SGSOY) is another stock in the Business Services sector that has outperformed, with a year-to-date increase of 30.9% [5] - The consensus estimate for SGS SA's current year EPS has risen by 0.4% over the past three months, and it holds a Zacks Rank of 2 (Buy) [5] - The Business - Services industry, to which SGS SA belongs, is currently ranked 92 and has declined by 3.6% this year [7]

Investors might want to bet on Distribution Solutions Group (DSGR) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. ...

The Business Services group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Distribution Solutions Group (DSGR) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out. Distribution Solutions Group is one of 316 companies in the Business Services group. The Business Services group cu ...

From a technical perspective, Distribution Solutions Group, Inc. (DSGR) is looking like an interesting pick, as it just reached a key level of support. DSGR's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world. A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with ...

Distribution Solutions Group, Inc. (NASDAQ:DSGR) Q2 2024 Earnings Conference Call August 1, 2024 9:00 AM ET Company Participants Steven Hooser - Three Part Advisors J. Bryan King – CEO and Chairman Ron Knutson – EVP and CFO Conference Call Participants Kevin Steinke - Barrington Research Operator Good day, and welcome to the Distribution Solutions Group Second Quarter 2024 Earnings Conference Call. At this time all participants are in a listen-only mode and a question-and-answer session will follow the form ...