Financial Data and Key Metrics Changes - The company reported revenue of $1.8 billion for fiscal year 2024, an increase of nearly 15% driven by strategic acquisitions [5][6] - Adjusted free cash flow grew to $175 million, reflecting strong operational performance [5] - Adjusted EBITDA for Q4 was $44.9 million, or 9.3% of sales, up 90 basis points year-over-year [27] 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 military sales and rep counts [29] - Jexpro Services experienced a 27.4% revenue growth in Q4, primarily from organic expansion [32] - Test Equity Group's Q4 sales were $191.3 million, with adjusted EBITDA at 7.8% of sales, up from 6.2% a year ago [33] Market Data and Key Metrics Changes - The manufacturing PMI remained in contraction territory for most of 2024, impacting overall market conditions [7] - Military sales for Lawson were down over 50% in 2024, significantly affecting total sales [18] - Aerospace and defense markets showed sequential growth, contributing positively to Jexpro Services [20] Company Strategy and Development Direction - The company is focused on strategic acquisitions to broaden scale and geographic footprint, with five acquisitions completed in 2024 [7][8] - Investments in sales force and technology are aimed at enhancing customer engagement and long-term profitability [11][12] - The company aims to achieve double-digit EBITDA margins for the Canada branch through integration and synergy realization [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in record performance for 2025 as market conditions improve [10] - The company is navigating macroeconomic challenges while focusing on internal initiatives to enhance profitability [9] - There is cautious optimism regarding military orders, with expectations for gradual recovery [19][73] Other Important Information - The company ended Q4 with approximately $473 million in net working capital and $335 million in liquidity [34] - Debt leverage at the end of Q4 was 3.5 times, within the targeted range of three to four times [34] - The company repurchased $2.6 million of stock during fiscal 2024 as part of its capital allocation strategy [35] Q&A Session Summary Question: Can you share on quarter-to-date sales levels across DSG compared to the end of Q4? - Management indicated that Lawson has started strong in Q1, with sales up compared to the previous year and flattish on a consolidated basis [48][49] Question: How have consolidated margins trended in Q1 versus Q4? - Margins are expected to remain consistent with Q4, with expectations for improvement as synergies from acquisitions are realized [50][51] Question: Was the fourth quarter organic revenue growth of 3.5% a positive surprise? - Management noted that the fourth quarter was firmer than expected, particularly in Jexpro Services, which sustained momentum [58][59] Question: What is the margin trajectory for Lawson moving through 2025? - Management highlighted that while there will be some compression due to military sales and sales force ramp-up, they expect to see improved productivity and margin recovery over time [64][68]

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]

| --- | --- | --- | --- | |------------------|-------|-------|-------| | | | | | | | | | | | | | | | | 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]