Slide 1: Q3 2022 Financial Results
NAS DAQ: DS GR Q3 2022 Financial Results November 3, 2022
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 • Q3 2022 Consolidated Highlights & Financial Results • Segment High
Slide 4: Q3 2022 Highlights
Q3 2022 Highlights • Strong top-line and bottom-line results across the three principal operating companies; performance of all three principal operating companies at or exceeding expected levels • Combined sales growth of 46.1%; organic sales growth of 15.4% is broad based within all segments; acqu
Slide 5: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Capex, NWC, and Reduce Debt Levels Human Capital When Free Cash Flow Invest in Core Pay Down Exceeds Investment Investments Where Businesses Debt Opportunities High Growth Opportunities Exist Strong Balance Sheet with a Focus on Investing in Highest ROIC Oppo
Slide 6: Operating Companies Discussion
Operating Companies Discussion 6
Slide 7: Q3 2022 Consolidated Financial Highlights
Q3 2022 Consolidated Financial Highlights Results Adjusted to Reflect Comparable Results Including Pre-Merger Lawson Products • Adjusted Net Sales of $347.2M, an increase of $109.5M or +46.1% over year ago quarter; organic growth of +15.4% • Adjusted EBITDA of $34.7M with 10.0% margin; up 63.5% from
Slide 8: Q3 2022 Consolidated Financial Highlights
Q3 2022 Consolidated Financial Highlights Results Inclusive of Lawson Products and Other Acquisitions Pre-Merger Results • Adjusted Net Sales 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
Slide 9: Lawson Products – MRO Focus
Lawson Products – MRO Focus Q3 2022 Highlights: Adjusted Net Sales (in millions) • Prior year Q3 2021 results are pre 4/1/2022 Merger $109.4 $93.7 • Sales +16.8%; all organic growth • Price increases in late 2021 and 2022 being realized • Ended September 30, 2022 with 1,010 sales Q3 2021 Q3 2022 rep
Slide 10: Gexpro Services – OEM Focus
Gexpro Services – OEM Focus Q3 2022 Highlights: Net Sales (in millions) • Sales of $103.7M; up $39.5M or 61.4%; organic growth of 13.9% $103.7 • Q3 2022 sales includes $30.8M incremental $64.3 revenue from 2021 and 2022 acquisitions (Omni, NEF, SIS, Resolux, and Frontier). Integrations continuing st
Slide 11: TestEquity – Industrial Technologies Focus
TestEquity – Industrial Technologies Focus Q3 2022 Highlights: Net Sales (in millions) • Sales of $116.7M; up $48.9M or 72.1%; $116.7 organic growth of 16.9% • Q3 2022 sales includes $37.6M incremental $67.8 revenue from 2021 and 2022 acquisitions (MCS, TEquipment and National Test Equipment). Integ
Slide 12: Financial Position and Capitalization Table
Financial Position and Capitalization Table Strong Balance Sheet and Capital Allocation Framework Capitalization Table as of 9/30 • Prudent leverage target of 3 - 4x Net Debt to Adjusted $000s Q3 2022 EBITDA Cash $ 25,171 • Trailing leverage of 3.4x, due partially to $63M in Current Assets 460,873 a
Slide 13: Progress Since April 2022 Mergers
Progress Since April 2022 Mergers Superior Leadership Fully Executed Cost Enhanced Go-to- Expanded Channels- Incentives for Cross- Synergies for IT, Market Strategy to-Market Selling Insurance Developed Sensitive to Economic Fully Built-out Operationalized Meaningful Develop Meaningful Environment w
Slide 14: Summary
Summary • Continuing strong path on a combined basis • Q3 results driven by both organic growth and acquired sales – aligns with growth strategy; combined 46.1% sales growth • Improvement in Adjusted EBITDA margin to 10.0% • All three operating companies at or exceeding expected performance levels •
Slide 15: Appendix
JSG visiRieurion » SOLUTIONS GROUP_“ Appendix 15
Slide 16: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Net Sales and EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results Lawson Products Gexpro Services TestEquity Other Consolidated DSG Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 GAAP Net Sal
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Net Sales and Adjusted EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results and Other Acquisitions – Pre-Acquisition Date Consolidated DSG Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 GAAP Net Sales $ 132,090 $ 135,561 $ 154,085 $
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Net Sales and EBITDA Reconciliation – Table Footnotes (1) Represents additional sales and operating income of Lawson pre-Merger results and Other Acquisitions results prior to their acquisition dates not in reported GAAP results (2) Merger transaction costs