Financial Performance - DSG reported a consolidated net income of $6,452,000 for the three months ended September 30, 2025[145]. - Adjusted EBITDA for DSG was $48,457,000 for the three months ended September 30, 2025, reflecting strong operational performance across segments[145]. - Total revenue for Q3 2025 was $517.96 million, up from $468.02 million in Q3 2024, representing a growth of approximately 10.7%[150]. - Operating income for Q3 2025 was $23.62 million, compared to $18.95 million in Q3 2024, reflecting an increase of 24.5%[150]. - Net income for Q3 2025 was $6.45 million, down from $21.92 million in Q3 2024, indicating a decline of 70.5%[150]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $130.36 million, compared to $139.80 million for the same period in 2025, showing a decrease of approximately 6.8%[148]. - The company reported a net income of $14.7 million, or 1.0% of total revenue, compared to a net income of $18.6 million, or 1.4% of total revenue, in the prior year[183]. Revenue Growth - Consolidated revenue increased by $49.9 million in Q3 2025 compared to Q3 2024, driven by $23.3 million from acquisitions and an organic revenue increase of $26.6 million or 6.0%[151]. - Consolidated revenue increased by $174.8 million, or 13.2%, to $1,498.4 million in the first nine months of 2025 compared to $1,323.6 million in the same period of 2024, driven by $123.7 million from acquisitions and a 4.0% increase in organic revenue[184]. - Lawson segment revenue increased by $3.6 million or 3.0% to $121.5 million in Q3 2025 compared to $117.96 million in Q3 2024[154]. - TestEquity segment revenue increased by $11.2 million, or 5.8%, to $206.5 million in Q3 2025, driven by an $8.0 million increase in test and measurement sales[161]. - Gexpro Services segment revenue increased by $14.4 million, or 12.4%, to $130.5 million in Q3 2025, primarily due to increased sales in renewable energy and aerospace markets[167]. - Canada Branch Division revenue increased by $20.9 million to $60.0 million in Q3 2025, primarily driven by the full quarter contribution from the 2024 acquisition of Source Atlantic[173]. - Lawson segment revenue increased by $9.1 million, or 2.5%, to $366.3 million, with a gross profit margin of 55.5% compared to 55.1% in the prior year[187][188]. - TestEquity segment revenue grew by $10.4 million, or 1.8%, to $590.3 million, while gross profit decreased by $4.3 million to $127.9 million, resulting in a gross profit margin of 21.7%[192][194]. - Gexpro Services segment revenue increased by $55.3 million, or 17.2%, to $377.2 million, with gross profit rising by $17.4 million to $118.0 million, maintaining a gross profit margin of 31.3%[198][200]. - Revenue from external customers for the Canada Branch Division increased by $100.2 million, or 151.7%, to $166.3 million for the nine months ended September 30, 2025, compared to $66.1 million in the same period of 2024[204]. Expenses and Costs - Selling, general and administrative expenses totaled $146.71 million in Q3 2025, up from $139.90 million in Q3 2024, reflecting an increase of 4.0%[150]. - Selling, general and administrative expenses decreased by $3.7 million to $60.9 million in Q3 2025 compared to $64.6 million in the prior year quarter, primarily due to lower severance and merger-related expenses[157]. - Total selling, general and administrative expenses increased to $433.8 million, or 29.0% of total revenue, compared to $417.9 million, or 31.6% of total revenue, in the prior year[184]. - Interest expense decreased to $13.96 million in Q3 2025 from $15.16 million in Q3 2024, a reduction of approximately 8.0%[150]. - Interest expense increased by $2.6 million to $42.4 million in the first nine months of 2025, primarily due to higher borrowings related to acquisitions[210]. - Income tax expense was $1.9 million in Q3 2025, reflecting a 23.0% effective tax rate, compared to an income tax benefit of $19.0 million in the prior year[181]. Strategic Initiatives - TestEquity's revenue growth is supported by strategic acquisitions and investments in e-commerce, targeting high-growth sectors like aerospace and telecommunications[129]. - Gexpro Services aims to increase revenue through geographic expansion and leveraging recent acquisitions to enhance installation and aftermarket services[131]. - Canada Branch Division's strategy includes introducing new product lines and services to previously underserviced geographic areas[133]. - The company plans to pursue acquisition opportunities that are complementary and financially accretive to its existing businesses[123]. - The company completed several acquisitions in 2024, contributing significantly to revenue growth and operational performance in 2025[151]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $66.9 million for the nine months ended September 30, 2025, compared to $10.7 million in the same period of 2024[218]. - The company had $69.2 million in cash and cash equivalents as of September 30, 2025, compared to $66.5 million at the end of 2024[214]. - Total net capital expenditures for property, plant, and equipment were $18.3 million for the nine months ended September 30, 2025, with expectations of $22.0 million to $25.0 million for the full fiscal year[228]. - The company repurchased 653,213 shares of common stock at an average cost of $30.69 per share for a total cost of $20.0 million during the nine months ended September 30, 2025[230]. - As of September 30, 2025, the company had $711.6 million in outstanding borrowings under the Amended Credit Agreement[225].
DSG(DSGR) - 2025 Q3 - Quarterly Report