Distribution Solutions Group Announces 2024 Second Quarter Results
Distribution Solutions Group (DSGR) reported its 2024 Q2 results, showing significant growth. Revenue increased by 16.3% YoY to $439.5 million, driven by recent acquisitions, despite a 5.7% decline in organic sales. Sequentially, organic sales rose by 3.8%. Operating income was $14.2 million, up from $13.8 million YoY. Adjusted operating income grew 11.3% to $38.9 million. Non-GAAP adjusted EBITDA was $45.2 million, a 25.3% sequential improvement.
Diluted EPS declined to $0.04 from $0.07 YoY, while non-GAAP adjusted diluted EPS was $0.40, down from $0.42 YoY but up from $0.25 QoQ. The company ended Q2 with $209.9 million in liquidity and a net debt leverage of 3.2x. CEO Bryan King highlighted the strategic acquisitions, including Source Atlantic, anticipated to close in Q3, enhancing DSG’s market presence in Canada.
Il Distribution Solutions Group (DSGR) ha riportato i risultati del secondo trimestre 2024, evidenziando una crescita significativa. I ricavi sono aumentati del 16,3% rispetto all'anno precedente, raggiungendo i 439,5 milioni di dollari, grazie a recenti acquisizioni, nonostante un calo del 5,7% nelle vendite organiche. Su base sequenziale, le vendite organiche sono aumentate del 3,8%. Il reddito operativo è stato di 14,2 milioni di dollari, in aumento rispetto ai 13,8 milioni dell'anno precedente. Il reddito operativo rettificato è cresciuto dell'11,3%, raggiungendo i 38,9 milioni di dollari. L'EBITDA rettificato non-GAAP è stato di 45,2 milioni di dollari, con un miglioramento sequenziale del 25,3%.
L'EPS diluito è diminuito a 0,04 dollari rispetto allo 0,07 dollari dell'anno precedente, mentre l'EPS diluito rettificato non-GAAP è stato di 0,40 dollari, in calo rispetto ai 0,42 dollari dell'anno precedente, ma in aumento rispetto ai 0,25 dollari rispetto al trimestre precedente. L'azienda ha chiuso il secondo trimestre con una liquidità di 209,9 milioni di dollari e un rapporto di indebitamento netto di 3,2 volte. Il CEO Bryan King ha evidenziato le acquisizioni strategiche, inclusa quella di Source Atlantic, che si prevede sarà completata nel terzo trimestre, migliorando la presenza di DSG nel mercato canadese.
Distribution Solutions Group (DSGR) informó sus resultados del segundo trimestre de 2024, mostrando un crecimiento significativo. Los ingresos aumentaron un 16.3% interanual, alcanzando los 439.5 millones de dólares, impulsados por adquisiciones recientes, a pesar de una disminución del 5.7% en las ventas orgánicas. Secuencialmente, las ventas orgánicas aumentaron un 3.8%. El ingreso operativo fue de 14.2 millones de dólares, en comparación con 13.8 millones del año anterior. El ingreso operativo ajustado creció un 11.3% hasta 38.9 millones de dólares. El EBITDA ajustado no-GAAP fue de 45.2 millones de dólares, lo que representa una mejora secuencial del 25.3%.
El EPS diluido cayó a 0.04 dólares desde 0.07 dólares interanual, mientras que el EPS diluido ajustado no-GAAP fue de 0.40 dólares, por debajo de 0.42 dólares interanual, pero por encima de 0.25 dólares en comparación con el trimestre anterior. La compañía finalizó el segundo trimestre con 209.9 millones de dólares en liquidez y un apalancamiento de deuda neta de 3.2x. El CEO Bryan King destacó las adquisiciones estratégicas, incluida Source Atlantic, que se anticipa que se cierre en el tercer trimestre, mejorando la presencia de DSG en el mercado canadiense.
Distribution Solutions Group (DSGR)는 2024년 2분기 실적을 발표하며 상당한 성장을 보여주었습니다. 수익은 전년 대비 16.3% 증가하여 4억 3,950만 달러에 달했으며, 이는 최근 인수에 힘입은 결과입니다. 하지만 유기적 판매는 5.7% 감소했습니다. 전분기 대비 유기적 판매는 3.8% 증가했습니다. 운영 소득은 1천 420만 달러로, 전년의 1천 380만 달러에서 증가했습니다. 조정된 운영 소득은 11.3% 증가하여 3천 890만 달러에 도달했습니다. 비-GAAP 조정 EBITDA는 4천 520만 달러로, 25.3%의 순환적 개선을 보였습니다.
희석된 EPS는 전년 대비 0.07 달러에서 0.04 달러로 감소했으며, 비-GAAP 조정 희석 EPS는 0.40 달러로, 전년 대비 0.42 달러에서 줄어들었지만 전분기 대비 0.25 달러에서 증가했습니다. 이 회사는 2분기를 2억 990만 달러의 유동성으로 마감했으며, 순부채 비율은 3.2배에 달합니다. CEO 브라이언 킹은 캐나다에서 DSG의 시장 점유율을 강화할 것으로 예상되는 Source Atlantic을 포함한 전략적 인수를 강조했습니다.
Le Distribution Solutions Group (DSGR) a annoncé ses résultats du deuxième trimestre 2024, montrant une croissance significative. Les revenus ont augmenté de 16,3 % par rapport à l'année précédente, atteignant 439,5 millions de dollars, grâce à des acquisitions récentes, malgré une baisse de 5,7 % des ventes organiques. Séquentiellement, les ventes organiques ont augmenté de 3,8 %. Le revenu d'exploitation s'élevait à 14,2 millions de dollars, en hausse par rapport à 13,8 millions de dollars l'année précédente. Le revenu d'exploitation ajusté a crû de 11,3 % pour atteindre 38,9 millions de dollars. L'EBITDA ajusté non-GAAP a été de 45,2 millions de dollars, représentant une amélioration séquentielle de 25,3 %.
Le BPA dilué a chuté à 0,04 dollar contre 0,07 dollar l'année précédente, tandis que le BPA dilué ajusté non-GAAP était de 0,40 dollar, en baisse par rapport à 0,42 dollar sur un an mais en hausse par rapport à 0,25 dollar par rapport au trimestre précédent. L'entreprise a terminé le deuxième trimestre avec une liquidité de 209,9 millions de dollars et un levier de dette nette de 3,2x. Le PDG Bryan King a souligné les acquisitions stratégiques, y compris Source Atlantic, qui devrait être finalisée au troisième trimestre, renforçant ainsi la présence de DSG sur le marché canadien.
Die Distribution Solutions Group (DSGR) hat die Ergebnisse des zweiten Quartals 2024 veröffentlicht, die ein signifikantes Wachstum zeigen. Der Umsatz ist im Jahresvergleich um 16,3 % auf 439,5 Millionen USD gestiegen, gefördert durch kürzlich getätigte Akquisitionen, trotz eines Rückgangs der organischen Verkäufe um 5,7 %. Im Vergleich zum Vorquartal stiegen die organischen Verkäufe um 3,8 %. Das Betriebsergebnis betrug 14,2 Millionen USD, ein Anstieg im Vergleich zu 13,8 Millionen USD im Vorjahr. Das bereinigte Betriebsergebnis wuchs um 11,3 % auf 38,9 Millionen USD. Das nicht-GAAP bereinigte EBITDA betrug 45,2 Millionen USD, was eine sequenzielle Verbesserung von 25,3 % darstellt.
Der verwässerte Gewinn pro Aktie (EPS) sank von 0,07 USD im Vorjahr auf 0,04 USD, während der nicht-GAAP bereinigte verwässerte EPS bei 0,40 USD lag, was einem Rückgang von 0,42 USD im Jahresvergleich entspricht, aber einem Anstieg von 0,25 USD im Vergleich zum Vorquartal. Das Unternehmen beendete das zweite Quartal mit 209,9 Millionen USD an Liquidität und einem Netto-Schuldenhebel von 3,2x. CEO Bryan King hob die strategischen Akquisitionen hervor, einschließlich Source Atlantic, die voraussichtlich im dritten Quartal abgeschlossen wird und die Marktpräsenz von DSG in Kanada verbessern wird.
- Revenue increased by 16.3% YoY to $439.5 million.
- Non-GAAP adjusted operating income grew by 11.3% to $38.9 million.
- Non-GAAP adjusted EBITDA increased by 12.7% YoY and 25.3% QoQ to $45.2 million.
- Sequential organic sales rose by 3.8%.
- Strong liquidity position with $209.9 million.
- Acquisition of Source Atlantic expected to drive growth.
- Organic sales declined by 5.7% YoY.
- Diluted EPS decreased to $0.04 from $0.07 YoY.
- Operating income margin decreased by 38 bps YoY.
Insights
Distribution Solutions Group's Q2 2024 results demonstrate solid performance amidst challenging market conditions. The 16.3% revenue growth to
The company's focus on margin enhancement is evident, with adjusted EBITDA reaching
DSG's liquidity position remains strong, with
The pending acquisition of Source Atlantic, a
While the diluted EPS of
DSG's Q2 results offer valuable insights into the current state of the specialty distribution market. The company's performance across its three verticals - Lawson MRO, Gexpro Services OEM and TestEquity industrial technology - provides a barometer for different sectors of the industrial economy.
The strong performance in the Lawson MRO vertical suggests resilience in maintenance and repair operations across industries. This could indicate that companies are focusing on maintaining existing equipment rather than making new capital investments, a common strategy during uncertain economic times.
The margin expansion in the Gexpro Services OEM vertical is particularly noteworthy. It may signal improving supply chain conditions and potentially easing inflationary pressures in the manufacturing sector. This could be a positive indicator for the broader industrial economy.
The improvement in the TestEquity industrial technology vertical, driven by end market recovery, is encouraging. The growth in Test & Measurement, Renewables and Technology segments points to potential increased investment in these areas, which could be a leading indicator of broader industrial growth.
The company's strategic acquisitions, particularly in Canada, reflect a trend of consolidation in the distribution industry. This move to expand geographical reach and enhance product offerings is likely a response to increasing competition and the need for economies of scale in the distribution sector.
Overall, DSG's results suggest a cautiously optimistic outlook for the industrial distribution market, with signs of recovery in key sectors balanced against ongoing economic uncertainties.
Quarterly Revenue Up
The following represents a summary of certain operating results (unaudited). See the reconciliations of GAAP to non-GAAP measures in Tables 2, 3 and 4.
|
Three Months Ended |
||||||||||||||||
|
June 30, |
|
March 31, |
||||||||||||||
(Dollars in thousands) |
2024 |
|
2023 |
|
% Change |
|
2024 |
|
% Change |
||||||||
Revenue |
$ |
439,536 |
|
|
$ |
377,984 |
|
|
16.3 |
% |
|
$ |
416,086 |
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
$ |
14,158 |
|
|
$ |
13,776 |
|
|
2.8 |
% |
|
$ |
2,783 |
|
|
N/A |
|
Non-GAAP adjusted operating income |
$ |
38,852 |
|
|
$ |
34,922 |
|
|
11.3 |
% |
|
$ |
29,761 |
|
|
30.5 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP adjusted EBITDA |
$ |
45,181 |
|
|
$ |
40,100 |
|
|
12.7 |
% |
|
$ |
36,067 |
|
|
25.3 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) as a percent of revenue |
|
3.2 |
% |
|
|
3.6 |
% |
|
-38bps |
|
|
0.7 |
% |
|
255bps |
||
Adjusted EBITDA as a percent of revenue |
|
10.3 |
% |
|
|
10.6 |
% |
|
-30bps |
|
|
8.7 |
% |
|
160bps |
||
"We are very excited about our recent announcement to acquire Source Atlantic, which is expected to close in the third quarter. This CAD
"We remain focused on actively working our pipeline of acquisition targets, incremental margin enhancement initiatives, and cost savings. These efforts, along with some end market recovery, drove DSG’s strong second quarter results. Through our asset-light business model our focus on growing operating cash flows and accelerating returns on invested capital, positions us well to maximize long-term shareholder value," concluded Mr.
2024 Second Quarter Summary(1)
-
Revenue increased
$61.6 million 16.3% , to$439.5 million $81.4 million 5.7% on comparable days, organic sales grew3.8% over the first quarter of 2024. The sequential sales increase was driven by improving sales in many of DSG's end markets, including Test & Measurement, Renewables, Technology and project-related business.
-
Operating income was
$14.2 million $12.2 million $12.5 million $13.8 million $38.9 million $34.9 million $29.8 million
-
Diluted income per share was
$0.04 $0.07 $0.40 $0.42 $0.25
-
Adjusted EBITDA was
$45.2 million 10.3% margin compared to$40.1 million 10.6% margin in the prior year quarter. Sequentially, adjusted EBITDA grew$9.1 million 25.3% from the first quarter of 2024; and increased as a percent of sales by 160bps.
-
The Company ended the second quarter with total liquidity of
$209.9 million $56.9 million $153.0 million $21.4 million $4.0 million $1.7 million
- Lawson completed the acquisition of S&S Automotive in May 2024.
(1) See reconciliation of GAAP to non-GAAP measures in tables 2, 3 and 4. |
Share and per share data for all periods presented reflect two-for-one stock split. |
Conference Call
Distribution Solutions Group, Inc. will conduct a conference call with investors to discuss 2024 second quarter results at 9:00 a.m. Eastern Time on August 1, 2024. The conference call is available by direct dial at 1-888-506-0062 in the
About Distribution Solutions Group, Inc.
Distribution Solutions Group ("DSG") is a premier multi-platform specialty distribution company providing high touch, value-added distribution solutions to the maintenance, repair & operations (MRO), the original equipment manufacturer (OEM) and the industrial technologies markets. DSG was formed through the strategic combination of Lawson Products, a leader in MRO distribution of C-parts, Gexpro Services, a leading global supply chain services provider to manufacturing customers, and TestEquity, a leader in electronic test & measurement solutions.
Through its collective businesses, DSG is dedicated to helping customers lower their total cost of operation by increasing productivity and efficiency with the right products, expert technical support and fast, reliable delivery to be a one-stop solution provider. DSG serves approximately 180,000 customers in several diverse end markets supported by approximately 3,700 dedicated employees and strong vendor partnerships. DSG ships from strategically located distribution and service centers to customers in
For more information on Distribution Solutions Group please visit www.distributionsolutionsgroup.com.
This release 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," "shall," "should," "strategy," "will," "would," and variations of them and other words and terms of similar meaning and expression (and the negatives of such words and terms) are intended to identify forward-looking statements. Forward-looking statements can also be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks, uncertainties and assumptions, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. DSG can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and DSG cautions readers not to place undue reliance on such statements, which speak only as of the date made. DSG undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Certain risks associated with DSG's business are also discussed from time to time in the reports DSG files with the SEC, including DSG's Annual Report on Form 10-K, DSG's Quarterly Reports on Form 10-Q and DSG's Current Reports on Form 8-K, which should be reviewed carefully. In addition, the following factors, among others, could cause actual outcomes and results to differ materially from those discussed in the forward-looking statements: (i) unanticipated difficulties, expenditures or any problems arising in connection with or after the combination of the businesses of Lawson Products, TestEquity and Gexpro Services (the "merger"), which may result in DSG not operating as effectively and efficiently as expected; (ii) the risk that stockholder litigation in connection with the merger or any other acquisition or business combination completed by DSG or any of its subsidiaries results in significant costs of defense, indemnification and liability; and (iii) the risks that DSG may encounter difficulties integrating the business of DSG with the business of other companies that DSG has acquired or may acquire or has otherwise combined with or may otherwise combine with, that DSG may not achieve the anticipated synergies contemplated with respect to any such business or transactions and that certain assumptions with respect to such business or transactions could prove to be inaccurate.
Distribution Solutions Group, Inc. Condensed Consolidated Balance Sheets (Dollars in thousands, except share data) (Unaudited) |
|||||||
|
June 30,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
46,786 |
|
|
$ |
83,931 |
|
Restricted cash |
|
10,125 |
|
|
|
15,695 |
|
Accounts receivable, less allowances |
|
235,802 |
|
|
|
213,448 |
|
Inventories |
|
320,748 |
|
|
|
315,984 |
|
Prepaid expenses and other current assets |
|
43,306 |
|
|
|
28,272 |
|
Assets held for sale |
|
3,589 |
|
|
|
— |
|
Total current assets |
|
660,356 |
|
|
|
657,330 |
|
Property, plant and equipment, net |
|
108,709 |
|
|
|
113,811 |
|
Rental equipment, net |
|
23,062 |
|
|
|
24,575 |
|
Goodwill |
|
428,308 |
|
|
|
399,925 |
|
Deferred tax asset, net |
|
84 |
|
|
|
95 |
|
Intangible assets, net |
|
276,896 |
|
|
|
253,834 |
|
Cash value of life insurance |
|
19,312 |
|
|
|
18,493 |
|
Right of use operating lease assets |
|
84,878 |
|
|
|
76,340 |
|
Other assets |
|
5,947 |
|
|
|
5,928 |
|
Total assets |
$ |
1,607,552 |
|
|
$ |
1,550,331 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
108,184 |
|
|
$ |
98,674 |
|
Current portion of long-term debt |
|
31,367 |
|
|
|
32,551 |
|
Current portion of lease liabilities |
|
16,877 |
|
|
|
13,549 |
|
Accrued expenses and other current liabilities |
|
108,116 |
|
|
|
97,241 |
|
Total current liabilities |
|
264,544 |
|
|
|
242,015 |
|
Long-term debt, less current portion, net |
|
573,654 |
|
|
|
535,881 |
|
Lease liabilities |
|
73,480 |
|
|
|
67,065 |
|
Deferred tax liability, net |
|
16,774 |
|
|
|
18,326 |
|
Other liabilities |
|
25,796 |
|
|
|
25,443 |
|
Total liabilities |
|
954,248 |
|
|
|
888,730 |
|
Stockholders' equity: |
|
|
|
||||
Preferred stock, |
|
|
|
||||
Authorized - 500,000 shares, issued and outstanding — None |
|
— |
|
|
|
— |
|
Common stock, |
|
|
|
||||
Authorized - 70,000,000 shares Issued - 47,636,856 and 47,535,618 shares, respectively Outstanding - 46,787,160 and 46,758,359 shares, respectively |
|
46,786 |
|
|
|
46,758 |
|
Capital in excess of par value |
|
674,074 |
|
|
|
671,154 |
|
Retained deficit |
|
(38,035 |
) |
|
|
(34,707 |
) |
Treasury stock – 849,696 and 777,259 shares, respectively |
|
(18,655 |
) |
|
|
(16,434 |
) |
Accumulated other comprehensive income (loss) |
|
(10,866 |
) |
|
|
(5,170 |
) |
Total stockholders' equity |
|
653,304 |
|
|
|
661,601 |
|
Total liabilities and stockholders' equity |
$ |
1,607,552 |
|
|
$ |
1,550,331 |
|
Distribution Solutions Group, Inc. Condensed Consolidated Statements of Operations (Dollars in thousands, except per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
439,536 |
|
|
$ |
377,984 |
|
|
$ |
855,622 |
|
|
$ |
726,254 |
|
Cost of goods sold |
|
288,009 |
|
|
|
241,961 |
|
|
|
560,686 |
|
|
|
457,360 |
|
Gross profit |
|
151,527 |
|
|
|
136,023 |
|
|
|
294,936 |
|
|
|
268,894 |
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses |
|
137,369 |
|
|
|
122,247 |
|
|
|
277,995 |
|
|
|
238,397 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
14,158 |
|
|
|
13,776 |
|
|
|
16,941 |
|
|
|
30,497 |
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(12,793 |
) |
|
|
(9,492 |
) |
|
|
(24,620 |
) |
|
|
(17,162 |
) |
Change in fair value of earnout liabilities |
|
(8 |
) |
|
|
36 |
|
|
|
(3 |
) |
|
|
(21 |
) |
Other income (expense), net |
|
359 |
|
|
|
(761 |
) |
|
|
97 |
|
|
|
(1,736 |
) |
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes |
|
1,716 |
|
|
|
3,559 |
|
|
|
(7,585 |
) |
|
|
11,578 |
|
Income tax expense (benefit) |
|
(180 |
) |
|
|
535 |
|
|
|
(4,257 |
) |
|
|
2,647 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
1,896 |
|
|
$ |
3,024 |
|
|
$ |
(3,328 |
) |
|
$ |
8,931 |
|
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per share of common stock |
$ |
0.04 |
|
|
$ |
0.07 |
|
|
$ |
(0.07 |
) |
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per share of common stock |
$ |
0.04 |
|
|
$ |
0.07 |
|
|
$ |
(0.07 |
) |
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding |
|
46,818,932 |
|
|
|
43,621,236 |
|
|
|
46,798,055 |
|
|
|
42,935,198 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average shares outstanding |
|
47,623,712 |
|
|
|
43,995,014 |
|
|
|
46,798,055 |
|
|
|
43,305,218 |
|
Distribution Solutions Group, Inc. Condensed Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) |
|||||||
|
Six Months Ended June 30, |
||||||
|
2024 |
|
2023 |
||||
Operating activities |
|
|
|
||||
Net income (loss) |
$ |
(3,328 |
) |
|
$ |
8,931 |
|
Adjustments to reconcile to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
35,587 |
|
|
|
30,306 |
|
Amortization of debt issuance costs |
|
1,320 |
|
|
|
1,002 |
|
Stock-based compensation |
|
1,891 |
|
|
|
4,392 |
|
Deferred income taxes |
|
(1,541 |
) |
|
|
86 |
|
Change in fair value of earnout liabilities |
|
3 |
|
|
|
21 |
|
(Gain) loss on sale of rental equipment |
|
(900 |
) |
|
|
(1,377 |
) |
(Gain) loss on sale of property, plant and equipment |
|
(5 |
) |
|
|
215 |
|
Charge for step-up of acquired inventory |
|
634 |
|
|
|
716 |
|
Net realizable value adjustment and write-offs for obsolete and excess inventory |
|
3,110 |
|
|
|
3,538 |
|
Bad debt expense |
|
106 |
|
|
|
933 |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
Accounts receivable |
|
(18,331 |
) |
|
|
(4,799 |
) |
Inventories |
|
(1,636 |
) |
|
|
(2,576 |
) |
Prepaid expenses and other current assets |
|
(15,345 |
) |
|
|
(6,405 |
) |
Accounts payable |
|
9,771 |
|
|
|
(8,936 |
) |
Accrued expenses and other current liabilities |
|
15,636 |
|
|
|
(624 |
) |
Other changes in operating assets and liabilities |
|
1,037 |
|
|
|
2,041 |
|
Net cash provided by (used in) operating activities |
|
28,009 |
|
|
|
27,464 |
|
Investing activities |
|
|
|
||||
Purchases of property, plant and equipment |
|
(5,829 |
) |
|
|
(7,796 |
) |
Business acquisitions, net of cash acquired |
|
(95,437 |
) |
|
|
(252,007 |
) |
Purchases of rental equipment |
|
(3,214 |
) |
|
|
(5,990 |
) |
Proceeds from sale of rental equipment |
|
2,110 |
|
|
|
2,969 |
|
Net cash provided by (used in) investing activities |
|
(102,370 |
) |
|
|
(262,824 |
) |
Financing activities |
|
|
|
||||
Proceeds from revolving lines of credit |
|
84,139 |
|
|
|
161,684 |
|
Payments on revolving lines of credit |
|
(40,285 |
) |
|
|
(274,134 |
) |
Proceeds from term loans |
|
— |
|
|
|
305,000 |
|
Payments on term loans |
|
(8,188 |
) |
|
|
(11,250 |
) |
Deferred financing costs |
|
— |
|
|
|
(3,419 |
) |
Proceeds from rights offering, net of offering costs of |
|
— |
|
|
|
98,469 |
|
Repurchase of common stock |
|
(1,683 |
) |
|
|
— |
|
Shares repurchased held in treasury |
|
(538 |
) |
|
|
(171 |
) |
Payment of financing lease principal |
|
(237 |
) |
|
|
(249 |
) |
Payment of earnout |
|
— |
|
|
|
(1,000 |
) |
Net cash provided by (used in) financing activities |
|
33,208 |
|
|
|
274,930 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(1,562 |
) |
|
|
541 |
|
Increase (decrease) in cash, cash equivalents and restricted cash |
|
(42,715 |
) |
|
|
40,111 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
99,626 |
|
|
|
24,740 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
56,911 |
|
|
$ |
64,851 |
|
Cash and cash equivalents |
$ |
46,786 |
|
|
$ |
44,244 |
|
Restricted cash |
|
10,125 |
|
|
|
20,607 |
|
Total cash, cash equivalents and restricted cash |
$ |
56,911 |
|
|
$ |
64,851 |
|
Distribution Solutions Group, Inc. |
|||||||
Table 1 - Selected Segment Financial Data |
|||||||
(Dollars in thousands) |
|||||||
(Unaudited) |
|||||||
|
|
|
|
||||
|
Three Months Ended |
||||||
|
June 30, |
||||||
|
2024 |
|
2023 |
||||
Revenue: |
|
|
|
||||
Lawson Products |
$ |
121,118 |
|
|
$ |
119,147 |
|
Gexpro Services |
|
107,134 |
|
|
|
108,274 |
|
TestEquity |
|
197,481 |
|
|
|
136,067 |
|
Other |
|
14,471 |
|
|
|
14,496 |
|
Intersegment revenue elimination |
|
(668 |
) |
|
|
— |
|
Total |
$ |
439,536 |
|
|
$ |
377,984 |
|
|
|
|
|
||||
Operating income (loss): |
|
|
|
||||
Lawson Products |
$ |
6,129 |
|
|
$ |
8,470 |
|
Gexpro Services |
|
8,091 |
|
|
|
8,778 |
|
TestEquity |
|
703 |
|
|
|
(3,182 |
) |
Other |
|
(765 |
) |
|
|
(290 |
) |
Total |
$ |
14,158 |
|
|
$ |
13,776 |
|
DISTRIBUTION SOLUTIONS GROUP, INC. |
SEC REGULATION G GAAP RECONCILIATIONS |
The Company reports its financial results in accordance with |
Distribution Solutions Group, Inc. |
|||||||||||
Table 2 - Reconciliation of GAAP Net Income (Loss) and GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA |
|||||||||||
(Dollars in thousands) |
|||||||||||
(Unaudited) |
|||||||||||
|
|
|
|
|
|
||||||
|
Three Months Ended |
||||||||||
|
June 30, 2024 |
|
June 30, 2023 |
|
March 31, 2024 |
||||||
Net income (loss) |
$ |
1,896 |
|
|
$ |
3,024 |
|
|
$ |
(5,224 |
) |
Income tax expense (benefit) |
|
(180 |
) |
|
|
535 |
|
|
|
(4,077 |
) |
Other income (expense), net |
|
(359 |
) |
|
|
761 |
|
|
|
262 |
|
Change in fair value of earnout liabilities |
|
8 |
|
|
|
(36 |
) |
|
|
(5 |
) |
Interest expense |
|
12,793 |
|
|
|
9,492 |
|
|
|
11,827 |
|
Operating income (loss) |
|
14,158 |
|
|
|
13,776 |
|
|
|
2,783 |
|
Depreciation and amortization |
|
18,535 |
|
|
|
14,584 |
|
|
|
17,052 |
|
Stock-based compensation(1) |
|
(307 |
) |
|
|
2,188 |
|
|
|
2,198 |
|
Severance and acquisition related retention expenses(2) |
|
8,313 |
|
|
|
2,437 |
|
|
|
10,716 |
|
Acquisition related costs(3) |
|
3,598 |
|
|
|
5,058 |
|
|
|
1,954 |
|
Inventory step-up(4) |
|
634 |
|
|
|
716 |
|
|
|
— |
|
Other non-recurring(5) |
|
250 |
|
|
|
1,341 |
|
|
|
1,364 |
|
Non-GAAP adjusted EBITDA |
$ |
45,181 |
|
|
$ |
40,100 |
|
|
$ |
36,067 |
|
|
|
|
|
|
|
||||||
Operating income (loss) as a percent of revenue |
|
3.2 |
% |
|
|
3.6 |
% |
|
|
0.7 |
% |
|
|
|
|
|
|
||||||
Adjusted EBITDA as a percent of revenue |
|
10.3 |
% |
|
|
10.6 |
% |
|
|
8.7 |
% |
(1) |
Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price |
(2) |
Includes severance expense for actions taken in 2024 and 2023 not related to a formal restructuring plan and acquisition related retention expenses for the Hisco and S&S Automotive acquisitions |
(3) |
Transaction and integration costs related to acquisitions |
(4) |
Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed by Lawson Products and TestEquity |
(5) |
Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items |
Distribution Solutions Group, Inc. |
|||||||||||||||||||||||
Table 3 - Reconciliation of GAAP Net Income (Loss) and GAAP Diluted EPS to Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS |
|||||||||||||||||||||||
(Dollars in thousands, except per share data) |
|||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||
|
June 30, 2024 |
|
June 30, 2023(3)(4) |
|
March 31, 2024 |
||||||||||||||||||
|
Amount |
|
Diluted EPS(2) |
|
Amount |
|
Diluted EPS(2) |
|
Amount |
|
Diluted EPS(2) |
||||||||||||
Net income (loss) |
$ |
1,896 |
|
|
$ |
0.04 |
|
|
$ |
3,024 |
|
|
$ |
0.07 |
|
|
$ |
(5,224 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pretax adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stock-based compensation |
|
(307 |
) |
|
|
(0.01 |
) |
|
|
2,188 |
|
|
|
0.05 |
|
|
|
2,198 |
|
|
|
0.05 |
|
Acquisition related costs |
|
3,598 |
|
|
|
0.08 |
|
|
|
5,058 |
|
|
|
0.11 |
|
|
|
1,954 |
|
|
|
0.04 |
|
Amortization of intangible assets |
|
12,206 |
|
|
|
0.26 |
|
|
|
9,406 |
|
|
|
0.21 |
|
|
|
10,746 |
|
|
|
0.23 |
|
Severance and acquisition related retention expenses |
|
8,313 |
|
|
|
0.17 |
|
|
|
2,437 |
|
|
|
0.06 |
|
|
|
10,716 |
|
|
|
0.23 |
|
Change in fair value of earnout liabilities |
|
8 |
|
|
|
— |
|
|
|
(36 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
Inventory step-up |
|
634 |
|
|
|
0.01 |
|
|
|
716 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
Other non-recurring |
|
250 |
|
|
|
0.01 |
|
|
|
1,341 |
|
|
|
0.03 |
|
|
|
1,364 |
|
|
|
0.03 |
|
Total pretax adjustments |
|
24,702 |
|
|
|
0.52 |
|
|
|
21,110 |
|
|
|
0.48 |
|
|
|
26,973 |
|
|
|
0.58 |
|
Tax effect on adjustments(1)(3) |
|
(7,238 |
) |
|
|
(0.15 |
) |
|
|
(5,552 |
) |
|
|
(0.13 |
) |
|
|
(7,334 |
) |
|
|
(0.16 |
) |
Deferred tax asset valuation allowance(5) |
|
(410 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,696 |
) |
|
|
(0.06 |
) |
Non-GAAP adjusted net income |
$ |
18,950 |
|
|
$ |
0.40 |
|
|
$ |
18,582 |
|
|
$ |
0.42 |
|
|
$ |
11,719 |
|
|
$ |
0.25 |
|
(1) |
The estimated tax effect on the adjustments is determined by applying the jurisdictional rate of the originating territory of the non-GAAP adjustments |
(2) |
Pretax adjustments to diluted EPS calculated on 47.624 million, 43.995 million and 46.777 million diluted shares for the second quarter of 2024 and 2023, and the first quarter of 2024, respectively |
(3) |
In the fourth quarter of 2023, the Company changed the treatment of amortization of intangible assets and the deferred tax asset valuation allowance to be included in the calculation of Non-GAAP adjusted net income and Non-GAAP adjusted diluted EPS. The calculation of the tax effect on adjustments was revised to consider the jurisdictional rate of the originating territory of the non-GAAP adjustments. Prior periods have been adjusted to conform to current period presentation. |
(4) |
Share and per share data for all periods presented reflect two-for-one stock split |
(5) |
Represents expense related to the deferred tax asset valuation allowance from interest expense limitations under Section 163(j) |
Distribution Solutions Group, Inc. |
|||||||||
Table 4 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted Operating Income |
|||||||||
(Dollars in thousands) |
|||||||||
(Unaudited) |
|||||||||
|
|
|
|
|
|
||||
|
Three Months Ended |
||||||||
|
June 30, |
|
March 31, |
||||||
|
2024 |
|
2023 |
|
2024 |
||||
Operating income (loss) |
$ |
14,158 |
|
|
$ |
13,776 |
|
$ |
2,783 |
|
|
|
|
|
|
||||
Gross profit adjustments: |
|
|
|
|
|
||||
Inventory step-up(1) |
|
634 |
|
|
|
716 |
|
|
— |
Total gross profit adjustments |
|
634 |
|
|
|
716 |
|
|
— |
|
|
|
|
|
|
||||
Selling, general and administrative expenses adjustments: |
|
|
|
|
|
||||
Acquisition related costs(2) |
|
3,598 |
|
|
|
5,058 |
|
|
1,954 |
Amortization of intangible assets(3) |
|
12,206 |
|
|
|
9,406 |
|
|
10,746 |
Stock-based compensation(4) |
|
(307 |
) |
|
|
2,188 |
|
|
2,198 |
Severance and acquisition related retention expenses(5) |
|
8,313 |
|
|
|
2,437 |
|
|
10,716 |
Other non-recurring(6) |
|
250 |
|
|
|
1,341 |
|
|
1,364 |
Total selling, general and administrative adjustments |
|
24,060 |
|
|
|
20,430 |
|
|
26,978 |
|
|
|
|
|
|
||||
Total adjustments |
|
24,694 |
|
|
|
21,146 |
|
|
26,978 |
Non-GAAP adjusted operating income |
$ |
38,852 |
|
|
$ |
34,922 |
|
$ |
29,761 |
(1) |
Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed by Lawson Products and TestEquity |
(2) |
Transaction and integration costs related to acquisitions |
(3) |
In the fourth quarter of 2023, the Company changed the treatment of amortization of intangible assets to be included in the calculation of Non-GAAP adjusted operating income. Prior periods have been adjusted to conform to current period presentation. |
(4) |
Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price |
(5) |
Includes severance expense for actions taken in 2024 and 2023 not related to a formal restructuring plan and acquisition related retention expenses for the Hisco and S&S Automotive acquisitions |
(6) |
Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731009470/en/
Company:
Distribution Solutions Group, Inc.
Ronald J. Knutson
Executive Vice President, Chief Financial Officer and Treasurer
1-888-611-9888
Investor Relations:
Three Part Advisors, LLC
Steven Hooser / Sandy Martin
214-872-2710 / 214-616-2207
Source: Distribution Solutions Group, Inc.
FAQ
What were Distribution Solutions Group's (DSGR) Q2 2024 revenue results?
How did DSGR's non-GAAP adjusted EBITDA perform in Q2 2024?
What is DSGR's diluted EPS for Q2 2024?
How much liquidity does DSGR have as of Q2 2024?
What impact did acquisitions have on DSGR's Q2 2024 results?
What is the significance of DSGR's acquisition of Source Atlantic?
