Slide 1: Q1 2024 Financial Results
NASDAQ: DSGR Q1 2024 Financial Results May 2, 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement Cautionary Note Regarding Forward-Looking Statements This presentation 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 ris
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. Agenda • 2024 Q1 Consolidated Highlights & Financial Results • Segment Highlights & Financial Results • Q&A See appendix for GAAP to Non-GAAP reconciliations. 3
Slide 4: Q1 Commentary
Q1 Commentary • Q1 revenue of $416M and adjusted EBITDA of $36M. • Q1 revenue up $67.8M or 19.5% including acquired revenue. Two-year stacked organic growth up 4.7% in Q1, despite organic revenue softness down 8.6% on comparable days. Although sequential trends improving, technology end-market, rene
Slide 5: Leading Specialty Industrial Distribution Platform
Leading Specialty Industrial Distribution Platform MRO Focus OEM Focus Industrial Technologies Focus Leading vendor managed Leading global supply chain services and Leading supplier of electronic and specialty inventory provider of C-parts C-parts provider to OEM and production supplies and T&M equi
Slide 6: 2024 Consolidated Financial Highlights
2024 Consolidated Financial Highlights Reported Revenue and Adjusted EBITDA • Q1 revenue of $416.1M; up $67.8M or 19.5% due to 2023 and 2024 acquisitions. Q1 two-year stacked organic growth up 4.7% while Q1 organic down down 8.6% on comparable days primarily from continued softness in technology end
Slide 7: Lawson Products – MRO Focus
Lawson Products – MRO Focus Q1 2024 Highlights: Revenue (in millions) • Q1 revenue down $7.1M over prior year same quarter on 1 less $125.3 $118.2 $109.8 selling day; up $9.3M sequentially from Q4 2023 with $2.3M from the ESS acquisition and organic growth-driven by pricing and expanding / new custo
Slide 8: Gexpro Services – OEM Focus
Gexpro Services – OEM Focus Q1 2024 Highlights: Revenue (in millions) • Q1 revenue down 2.3% over prior year same quarter; up $5.5M sequentially from Q4 2023. Strong Aerospace & Defense and $101.0 $93.2 $98.7 improving Technology end markets most recently drove sequential sales growth. YoY, excludin
Slide 9: TestEquity – Industrial Technologies Focus
TestEquity – Industrial Technologies Focus Q1 2024 Highlights: Revenue (in millions) • Q1 Revenue +74.3% or $79.8M; primarily driven by Hisco acquisition; organic revenue down 15.9% or $17.1M. Sales $190.7 $187.1 softness in core legacy business as T&M "capital" type project headwinds continue $107.
Slide 10: Other Financial Highlights
Other Financial Highlights Robust Net Working Capital Focus on Deleveraging via Earnings Growth and Free Cash Flow Total Liquidity Investment Generation $433.4M 3.6x ~$298M Leverage(1) at April 1, 2022 Merger Close ~$284M Accounts $221.3M Receivable $313.8M Inventory ò 3.0x $(101.7)M Accounts Payabl
Slide 11: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Q1'24 trade working capital $433M Q1 '24 3.0x(2) Net Debt Leverage TTM cash flows from operating TTM Free Cash Flow(1) Conversion activities of $95M of ~110% 5 highly commercially strategic & 46.8M shares outstanding accretive, high ROIC tuck-in $29.0M availa
Slide 12: Summary
Summary • Sequential progress despite tough sales comps; continued softness of certain end-markets experienced. • Process and structural optimization initiatives for each business unit well underway. • Q1 results driven primarily by acquired revenue – aligns with growth strategy; two-year stacked or
Slide 13: Appendix
5SG DISTRIBUTION 2 SOLUTIONS GROUP_/“ Appendix 13
Slide 14: Q1 2024 Consolidated Financial Highlights
Q1 2024 Consolidated Financial Highlights Results Inclusive of Pre-Acquisition Results • Adjusted Revenue and adjusted EBITDA below include the reported GAAP results and the pre-acquisition results of other businesses that were acquired at any time during the Q1 2023-Q1 2024 period. Adjusted Revenue
Slide 15: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q1 Revenue and Adjusted EBITDA Reconciliation ($000s) (Unaudited) Lawson Products Gexpro Services TestEquity All Other Eliminations Consolidated DSG Quarter Ended Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Revenue
Slide 16: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Revenue and Adjusted EBITDA Reconciliation ($000s) Results Inclusive of Acquisitions – Pre-Acquisition Date (Unaudited) Consolidated DSG Quarter Ended Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Revenue $ 348,270 $ 377,984 $ 438,909 $ 405,239 $ 416,086 Pre-acqui
Slide 17: GAAP to Non-GAAP Reconciliations – Table Footnotes
GAAP to Non-GAAP Reconciliations Adjusted Revenue and EBITDA Reconciliation – Table Footnotes (1) Represents additional revenue and operating income of acquisitions prior to their acquisition dates not in reported GAAP results (2) Transaction and integration costs related to acquisitions (3) Expense
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations GAAP Net Income (Loss) and GAAP Diluted EPS to Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS Reconciliation ($000s, except per share data) (Unaudited) Consolidated DSG Q1 2024 Q1 2023(3),(4) Q4 2023 Amount Diluted EPS(2) Amount Diluted EPS(2) Amount