Financial Data and Key Metrics Changes - In Q1 2024, consolidated revenue was $416 million, representing a 19.5% increase driven by strategic inorganic growth compared to the previous year [43][98] - Adjusted EBITDA margin improved sequentially from 8.4% in Q4 2023 to 8.7% in Q1 2024, although still below expectations due to market softness and internal initiatives [45][100] - Adjusted diluted EPS was $0.25 for the quarter, with a GAAP diluted loss per share of $0.11, reflecting higher depreciation and amortization [102] Business Line Data and Key Metrics Changes - Lawson Products reported sales of $118.2 million, down 4.2% on comparable days, but up 7.6% compared to Q4 2023 [110] - Gexpro Services saw total sales decrease by 2.3% to $98.7 million, but increased by 4.2% on comparable days from Q4 2023, with strong demand in aerospace and defense [112][113] - TestEquity Group's sales grew 74.3% to $187.1 million, primarily due to the acquisition of Hisco, but excluding Hisco, sales were down 14.6% [107] Market Data and Key Metrics Changes - The automotive market remains strong, with S&S Automotive acquisition expected to enhance customer value proposition and expand market share [69][70] - The semiconductor industry showed signs of recovery, with improved sales expected as customer confidence returns [76][77] - Government sector delays in purchase orders have impacted organic revenue growth, but there is confidence in future spending [66] Company Strategy and Development Direction - The company aims to achieve over $3.3 billion in total sales within five years, driven by both organic and inorganic growth initiatives [48] - Recent acquisitions, including Emergent Safety Supply and S&S Automotive, are part of a strategy to enhance product offerings and customer engagement [49][50] - The focus on optimizing sales force productivity and territory management is expected to drive future growth [61][63] Management's Comments on Operating Environment and Future Outlook - Management acknowledged pockets of softness in certain end markets but expressed confidence in the long-term growth trajectory and ongoing initiatives to improve margins [45][56] - The company is optimistic about the integration of acquisitions and the potential for increased sales and profitability in the second half of 2024 [116] - There is a focus on cost rationalization and margin improvement across all business units, particularly in the TestEquity Group [85][88] Other Important Information - The company ended the quarter with approximately $284 million in liquidity, including $85.6 million in cash [117] - The cash conversion ratio was nearly 110% on a trailing 12-month basis, indicating strong cash flow management [118] - The company is actively recruiting additional sales representatives to drive growth in key territories [26][28] Q&A Session Summary Question: Context on S&S acquisition and integration - Management highlighted the importance of the S&S acquisition for enhancing the Kent Automotive division and improving EBITDA margins [9][11] Question: Outlook on margins for Q2 - Management confirmed expectations for sequential margin improvement across all segments in Q2 2024 [17][19] Question: Trend in Lawson sales representative headcount - Management acknowledged a slight decrease in headcount but emphasized ongoing recruitment efforts and strategic territory management [26][27]

This presentation contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. Terms such as "aim," "anticipate," "believe," "contemplates," "continues," "could," "ensure," "estimate," "expect," "forecasts," "if," "intend," "likely," "may," "might," "objective," "outlook," "plan," "positioned," "potential," "predict," "probable," "project," " ...

Distribution Solutions Group (DSGR) came out with quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.26 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -13.79%. A quarter ago, it was expected that this industrial products and tools maker would post earnings of $0.14 per share when it actually produced earnings of $0.22, delivering a surprise of 57.14% ...

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, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file Number: 0-10546 DISTRIBUTION SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 36-2229304 301 Commerce ...

Revenue Performance - First quarter revenue increased by 19.5% to $416.1 million compared to $348.3 million in the same quarter last year, with a sequential increase of 2.7% from $405.2 million in Q4 2023[6] - Revenue for Q1 2024 was $416.1 million, a 19.5% increase from $348.3 million in Q1 2023[23] - Total revenue from the TestEquity segment increased significantly to $187.1 million in Q1 2024 from $107.4 million in Q1 2023, marking a 74.2% increase[23] Profitability Metrics - Adjusted EBITDA for the first quarter was $36.1 million, representing 8.7% of revenue, down from $39.4 million and 11.3% in the prior year quarter, but up from $33.9 million and 8.4% sequentially[9] - Non-GAAP adjusted EBITDA for Q1 2024 was $36.1 million, compared to $39.4 million in Q1 2023, a decrease of 5.9%[27] - Operating income as a percentage of revenue was 0.7%, down from 4.8% in the prior year quarter[6] - The company reported an operating income of $2.8 million, a significant decrease of 83.4% from $16.7 million in the prior year quarter, primarily due to non-recurring costs[6] - Operating income for Q1 2024 was $2,783,000, a decrease from $16,721,000 in Q4 2023[37] - Non-GAAP adjusted operating income for Q1 2024 was $29,761,000, compared to $32,783,000 in Q1 2023[37] Net Income and Loss - Net loss for Q1 2024 was $5.2 million, compared to a net income of $5.9 million in Q1 2023[21] - Diluted loss per share for the quarter was $0.11, compared to diluted income per share of $0.14 in the year-ago quarter, with non-GAAP adjusted diluted earnings per share at $0.25[9] - The company reported a basic loss per share of $0.11 in Q1 2024, down from a profit of $0.14 per share in Q1 2023[21] Cash and Liquidity - Total liquidity at the end of the first quarter was $283.9 million, consisting of $85.6 million in cash and $198.3 million available under its credit facility[9] - Total cash, cash equivalents, and restricted cash at the end of Q1 2024 was $85.6 million, up from $31.3 million at the end of Q1 2023[21] - Cash used in investing activities was $16.0 million in Q1 2024, compared to $5.1 million in Q1 2023[21] - The company acquired businesses net of cash acquired for $13.1 million in Q1 2024[21] Acquisitions and Growth Strategy - The company completed the acquisition of Emergent Safety Supply in January 2024 and announced the acquisition of S&S Automotive, which has annual revenues of approximately $40 million, to enhance its product offerings[3] - Two-year stacked organic revenue grew by 4.7%, despite a current quarter organic revenue decline of 8.6% on comparable days, with growth driven by acquisitions[9] - The company is actively pursuing a pipeline of acquisition targets and margin enhancement initiatives to maximize long-term shareholder value[4] Expenses and Adjustments - Total selling, general and administrative expenses adjustments increased to $26,978,000 in Q1 2024 from $16,062,000 in Q1 2023[37] - Amortization of intangible assets was $10,746,000 in Q1 2024, up from $9,152,000 in Q1 2023[37] - Acquisition related costs were $1,954,000 in Q1 2024, down from $4,099,000 in Q4 2023[37] - Stock-based compensation remained relatively stable at $2,198,000 in Q1 2024 compared to $2,204,000 in Q1 2023[37] - Severance and acquisition related retention expenses were $10,716,000 in Q1 2024, significantly higher than $351,000 in Q1 2023[37] - Other non-recurring expenses increased to $1,364,000 in Q1 2024 from $256,000 in Q1 2023[37] - Total adjustments for Q1 2024 were $26,978,000, compared to $16,062,000 in Q1 2023[37] - The company reported a gross profit adjustment of $716,000 in Q4 2023, which was not present in Q1 2024[37] Future Outlook - The company expects sequential margin improvements as 2024 progresses, supported by its asset-light business model and focus on cash flow growth[4]

Distribution Solutions Group, Inc. (DSGR) will report first-quarter 2024 results on May 2, before the bell.The company’s earnings surprise history has been decent. Earnings beat the Zacks Consensus Estimate in two of the four trailing quarters and missed twice, the average surprise being 13.3%.Q1 ExpectationsThe Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $430.6 million, indicating year-over-year growth of 23.6%. We expect recent acquisitions to have made significant con ...

Of course, investors hate to see large pullbacks in the market even if corrections can be healthy for the long term. Amid the call for the market to correct itself, some of the strongest-performing stocks can cool and then continue their extended rallies.Given the strong performance of the Zacks Business Services sector over the last year this could be the case for Distribution Solutions Group (DSGR)  and TriNet (TNET)  which have been two of the top performers.Performance Overview Distribution Solutions Gr ...

iantfoto/E+ via Getty Images Introduction Distribution Solutions Group (NASDAQ:DSGR) has quickly come up on the radar of more investors, and rightfully so. Run by CEO Bryan King, who has a lengthy investment management background, via a number of acquisitions in addition to their Lawson merger in 2022, the team has added a good amount of value to the business via M&A since their merger. Adjusted for the stock split, the stock is up ~75% on a 1-year basis and is now beginning to trade at a level more app ...

Distribution Solutions Group (DSGR) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following ...

Financial Data and Key Metrics Changes - The company reported 2023 annual sales of $1.6 billion, an increase of over 36%, with comparable sales rising by almost 24% despite a challenging sales environment in key markets like technology and renewables [2][10] - Adjusted EBITDA for the year was $157 million, up nearly 28%, with an EBITDA margin of 10% [136] - The company ended the year with a GAAP diluted loss per share of $0.20, compared to earnings per share of $0.21 in the previous year [12] Business Segment Data and Key Metrics Changes - Lawson Products achieved sales of $468.7 million for the full year, a 9.1% increase, while fourth-quarter sales were $109.8 million, slightly up from $108 million year-over-year [13] - Gexpro Services' full-year adjusted EBITDA grew to $45.2 million, or 11.1% of sales, compared to $43.2 million the previous year [15] - TestEquity's fourth-quarter sales increased by $85.3 million to $190.7 million, with Hisco contributing $96.6 million, although organic volume declined by 11.4% [16] Market Data and Key Metrics Changes - The renewables marketplace is expected to improve in 2024, supported by a positive book-to-bill ratio [7] - The technology market faced challenges, delaying several customer projects into 2024, which negatively impacted EBITDA by over $8.4 million for the year [7][57] Company Strategy and Development Direction - The company aims to increase consolidated EBITDA margin into the teens and ensure all business verticals operate with a margin above 12% within the next few years [3] - The integration of Hisco is expected to unlock significant cost synergies and enhance revenue opportunities across the company's verticals [4][8] - The company plans to continue making prudent decisions to create value and improve long-term returns while generating cash [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges and highlighted a commitment to driving business growth through innovative leadership and distribution experience [20] - There are indications of increased quoting activity and a potential revenue reacceleration in softer market segments [21] - Management acknowledged the need for normalization of inventory levels and customer spending to achieve positive organic growth in the second half of 2024 [27][46] Other Important Information - The company ended 2023 with $99.6 million in cash and no borrowings on its revolver, while also increasing its share repurchase program by $25 million [47][48] - A successful rights offering and a two-for-one stock split were executed to balance capital structure and liquidity objectives [48] Q&A Session Summary Question: What is the outlook for organic growth in 2024? - Management indicated that organic growth is expected to return in the second half of 2024, contingent on improvements in softer end markets [27][46] Question: How are margins trending in the first quarter? - Management noted that margin pressure is anticipated in Q1, similar to Q4, but expects sequential improvement as the year progresses [52][88] Question: What are the impacts of inventory destocking on revenue? - Management acknowledged that inventory destocking has affected revenue, particularly in the test and measurement equipment sector, but expects recovery as market conditions normalize [55][57] Question: How is the integration of Hisco progressing? - The integration of Hisco is expected to enhance margins and operational efficiencies, with significant synergies anticipated over the next few years [119][120] Question: What is the company's approach to share buybacks? - The company is focused on disciplined capital allocation and will consider share buybacks if the stock price is significantly below its perceived terminal value [115][125]