Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Q1 2023 Earnings Presentation
18 slides from Distribution Solutions's earnings presentation, May 4, 2023
Slide 1: Q1 2023 Financial Results
NASDAQ: DSGR Q1 2023 Financial Results May 4, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement Cautionary Note Regarding Forward-Looking Statements This investor deck contains 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 un
Slide 3: Earnings Call Agenda
Earnings Call Agenda Today’s Conference Call Will Discuss Results Primarily on an Adjusted (Non-GAAP) and Comparable Operations Basis. The complexities of Reverse Merger Accounting treatment makes GAAP comparisons difficult. Agenda • Q1 2023 Consolidated Highlights & Financial Results • Segment High
Slide 4: Q1 Highlights
Q1 Highlights • Q1 GAAP Revenue of $348M, Operating Income of $17M and Adjusted EBITDA of $39M, on strong top-line and bottom-line growth • Q1 comparable revenue growth of 28.1% and organic revenue growth of 13.7%, which includes the results of Lawson Products for the Pre-Merger period • Generated A
Slide 5: Creating a More Unified Platform
Creating a More Unified Platform More closely aligns TestEquity to DSG and strengthens the overall organization's value proposition • Extended cross-sell opportunities • Expanded value-added capabilities across platform • Geographic pull-through deeper into Mexico and South America • Expected to acc
Slide 6: Operating Companies Update and Value Drivers
Operating Companies Update and Value Drivers 6
Slide 7: Q1 2023 Consolidated Financial Highlights
Q1 2023 Consolidated Financial Highlights Results Adjusted to Reflect Comparable Results Including Pre-Merger Lawson Products • Adjusted Revenue of $348.3M, an increase of $76.3M or +28.1% over year ago quarter; organic growth of +13.7% • Adjusted EBITDA of $39.4M with 11.3% margin; up 73.6% from $2
Slide 8: Q1 2023 Consolidated Financial Highlights
Q1 2023 Consolidated Financial Highlights Results Inclusive of Lawson Products and Other Acquisitions Pre-Merger Results • Adjusted Revenue and Adjusted EBITDA below include the reported GAAP results and (1) pre- Merger results of the Lawson and Other segment and (2) the pre-acquisition results of o
Slide 9: Lawson Products – MRO Focus
Lawson Products – MRO Focus Q1 2023 Highlights: Adjusted Revenue (in millions) • Prior year Q1 2022 results are pre 4/1/2022 $125.3 Merger $104.9 • Adjusted Revenue +19.4%; all organic growth- driven by expanding and new customer relationships • Price increases throughout 2022 and 2023 being realize
Slide 10: Gexpro Services – OEM Focus
Gexpro Services – OEM Focus Q1 2023 Highlights: Revenue (in millions) • Revenue of $101.0M; up $19.3M or 23.7%; organic growth of 18.7% $101.0 • Q1 2023 revenue includes $4.0M of revenue from $81.7 the 2022 acquisition of Frontier. Integrations continuing strong • Value creation initiatives includin
Slide 11: TestEquity – Industrial Technologies Focus
TestEquity – Industrial Technologies Focus Q1 2023 Highlights: Revenue (in millions) • Revenue of $107.4M; up $35.0M or 48.3%; driven primarily from acquisitions $107.4 • Q1 2023 revenue includes $34.9M of revenue $72.4 from 2022 acquisitions (TEquipment, National Test Equipment and Instrumex). Inte
Slide 12: Financial Position and Capitalization Table
Financial Position and Capitalization Table Strong Balance Sheet and Capital Allocation Framework Capitalization Table as of March 31, 2023 • Prudent leverage target of 3 - 4x Net Debt to Adjusted $000s Q1 2023 EBITDA Cash $ 31,144 • Trailing net debt to 2023 adjusted EBITDA leverage ratio Current A
Slide 13: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Q1 '23 trade working capital $352M and to-date Q1 '23 2.7x Net Debt to incremental investment in Adjusted EBITDA Leverage working capital of $24M Invest in Core Pay Down Businesses Debt Balance Sheet focused on Highest ROIC Opportunities Bolt-on Buy Back Acqu
Slide 14: Summary
Summary • Four quarters of sequential margin improvement; expected continuing strong path on a combined basis • Q1 results driven by both organic growth and acquired revenue – aligns with growth strategy; combined 28.1% adjusted revenue growth • Improvement in Adjusted EBITDA margin to 11.3% over 10
Slide 15: Appendix
JSG visiRieurion » SOLUTIONS GROUP_“ Appendix 15
Slide 16: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q1 Adjusted Revenue and EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results Lawson Products Gexpro Services TestEquity All Other Consolidated DSG Quarter Ended Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Revenue and Adjusted EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results and Other Acquisitions – Pre-Acquisition Date Consolidated DSG Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 GAAP Revenue $ 154,085 $ 321,336 $ 347,151 $ 328
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Revenue and EBITDA Reconciliation – Table Footnotes (1) Represents additional revenue and operating income of Lawson pre-Merger and Other Acquisitions prior to their acquisition dates not in reported GAAP results (2) Merger transaction costs related to the n
Distribution Solutions Group — Q1 2023 Earnings Presentation on 6ix