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Distribution Solutions Group Announces 2025 Second Quarter Results

Strong 14.3% Revenue Growth Drives Improved Operating Income, Cash Flows and Sequential Margins

FORT WORTH, Texas--(BUSINESS WIRE)-- Distribution Solutions Group, Inc. (NASDAQ:DSGR) ("DSG" or the "Company"), a premier specialty distribution company, today announced consolidated results for the second quarter ended June 30, 2025. This press release is supplemented by an earnings presentation at .

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.

Bryan King, CEO and Chairman, said, "We are pleased to deliver strong top and bottom-line results and cash flows for the quarter. Sales increased 14.3% to $502.4 million for the quarter, driven by acquisitions and a 3.3% average daily organic sales growth versus last year. Sequentially, seasonal daily sales grew by 2.4% over the first quarter. Adjusted EBITDA rose to $48.6 million, or 9.7% of sales, and grew year-over-year and sequentially by 7.5% and 13.5%, respectively. Compared to the same quarter last year, Adjusted EBITDA margins declined slightly pressured by approximately 60bps from our Source Atlantic acquisition. However, we saw a lift in margin sequentially as we vigorously work on improving margins in Canada.

"In the second quarter, each of our operational teams delivered sequential expansion of adjusted margins driven partially by an expected seasonality benefit, but also evidencing progress on the execution of initiatives across our DSG platform. Sequentially, Lawson鈥檚 net margins in the quarter expanded from 11.9% to 12.6%, Gexpro Services expanded from 12.6% to 13.4%, TestEquity expanded from 6.8% to 6.9% and Canada Branch Division expanded from 5.2% to 6.5%. Initiatives to improve margins in each of our five 2024 acquisitions are still in the early stages, and we remain confident in our plan to enhance margins further and achieve higher returns. During the quarter, the teams also improved working capital management, enabling us to generate $33.3 million from cash flows from operations while ending the quarter with no outstanding revolver debt. We are well positioned with liquidity and flexibility as we evaluate our acquisition pipeline.

"DSG鈥檚 core strengths include strong vendor relationships and robust source capabilities, which have become increasingly important amid ongoing trade policy changes. These shifts have driven greater customer engagement as DSG teams help guide customers through sourcing options and product alternatives to add value. We remain cautiously optimistic about the remainder of 2025 given this uncertainty. In the first half of 2025, our stock buyback program was active, and we repurchased $20.0 million of DSGR stock, with $8.8 million of the repurchases occurring in the second quarter. I am confident that we will continue to build strong businesses through a combination of organic growth and the acquisition of strategic bolt-on businesses. We are fully aligned with shareholders and expect that by generating significant free cash flow and building structurally higher margin businesses, that our shareholders will be rewarded with an expanded valuation," concluded Mr. King.

2025 Second Quarter Summary⁽¹⁾

• Revenue increased $62.9 million, or 14.3%, to $502.4 million, driven by $48.8 million of incremental revenue from five acquisitions closed in 2024. Organic sales grew 3.3% over a year ago and 5.1% sequentially over the first quarter of 2025.

• Operating income was $26.8 million, net of $11.7 million of non-cash acquired intangible amortization and $1.4 million of non-recurring severance and acquisition-related retention costs, stock-based compensation, acquisition-related costs and other non-recurring items. This compares to an operating income of $14.2 million in the prior year quarter, net of similar items as 2024. Adjusted operating income, excluding these non-cash and non-recurring items, was $39.9 million in the current quarter compared to $38.9 million in the year-ago quarter and $34.4 million in the first quarter of 2025.

• Diluted net income per share was $0.11 for the quarter compared to diluted net income per share of $0.04 in the year-ago quarter.

• Adjusted EBITDA grew $3.4 million to $48.6 million, or 9.7% of sales, compared to $45.2 million, or 10.3% of sales in the prior year quarter. Inclusion of the 2024 Source Atlantic acquisition compressed Adjusted EBITDA as a percentage of sales by approximately 60bps over the year ago quarter. Sequentially, Adjusted EBITDA increased by $5.8 million from the first quarter of 2025 and increased as a percentage of sales by 70bps.

• Cash flow from operations was $33.3 million for the quarter. Uses of cash for the quarter included net capital expenditures of $5.5 million and share repurchases of $8.8 million.

• The Company ended the quarter with total liquidity of $314.4 million, consisting of $61.8 million of cash (restricted and unrestricted) and $252.7 million available under its credit facility with net debt leverage of 3.5x.

Conference Call

Distribution Solutions Group, Inc. will conduct a conference call with investors to discuss 2025 second quarter results at 9:00 a.m. Eastern Time on July 31, 2025. The conference call is available by direct dial at 1-888-506-0062 in the U.S. or 1-973-528-0011 from outside of the U.S. The participant access code is 661521. A replay of the conference call will be available by telephone approximately two hours after completion of the call through August 14, 2025. Callers can access the replay by dialing 1-877-481-4010 in the U.S. or 1-919-882-2331 outside the U.S. The passcode for the replay is 52605. A streaming audio of the call and an archived replay will also be available on the investor relations page of Distribution Solutions Group's website. Presentations may be supplemented by a series of slides appearing on the company's investor relations home page at .

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 200,000 customers in several diverse end markets supported by approximately 4,400 dedicated employees and strong vendor partnerships. DSG ships from strategically located distribution and service centers to customers in North America, Europe, Asia, South America and the Middle East.

For more information on Distribution Solutions Group, please visit .

This release 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 鈥渟afe-harbor鈥� provisions under the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. The Terms "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. DSG undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise. Each forward-looking statement speaks only as of the date on which such statement is made, and DSG undertakes no obligation to update any such statement to reflect events or circumstances arising after such date. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Factors that could cause or contribute to such differences or that might otherwise impact DSG鈥檚 business, financial condition and results of operations include the risks that DSG may encounter difficulties integrating the business of DSG with the business of other companies that DSG has combined with or may otherwise combine with and that certain assumptions with respect to such business or transactions could prove to be inaccurate. Certain risks associated with DSG鈥檚 business are also discussed from time to time in the reports DSG files with the Securities and Exchange Commission, including the Company鈥檚 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K or other reports the Company may file from time to time with the Securities and Exchange Commission, which should be reviewed carefully.

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View source version on businesswire.com:

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.