Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Q2 2024 Earnings Presentation
19 slides from Distribution Solutions's earnings presentation, Aug 1, 2024
Slide 1: Q2 2024 Financial Results
NASDAQ: DSGR Q2 2024 Financial Results August 1, 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 Q2 Consolidated Highlights & Financial Results • Source Atlantic Acquisition Discussion • Segment Highlights & Financial Results • Q&A See appendix for
Slide 4: Q2 2024 Commentary
Q2 2024 Commentary • Q2 revenue of $440M and adjusted EBITDA of $45M or 10.3%. • Q2 revenue up $61.6M or 16.3% including acquired revenue of $81.4M. While organic sales declined 5.7% on comparable days, organic sales grew 3.8% over the first quarter of 2024. The sequential sales increase was driven
Slide 5: Source Atlantic Acquisition
Source Atlantic Acquisition • Source Atlantic is a leading Canadian wholesale distributor providing product and service solutions for the industrial, government, commercial and residential contractor markets • Creates high-touch, specialty distribution platform, around one Lawson / DSG Canadian regi
Slide 6: 2024 Consolidated Financial Highlights
2024 Consolidated Financial Highlights Reported Revenue and Adjusted EBITDA • Q2 revenue of $439.5M; up $61.6M or 16.3% due to 2023 and 2024 acquisitions. While organic sales declined 5.7% on comparable days, organic sales grew 3.8% over the first quarter of 2024.The sequential sales increase was dr
Slide 7: Lawson Products – MRO Focus
Lawson Products – MRO Focus Q2 2024 Highlights: Revenue (in millions) • Q2 revenue up over prior year and sequentially driven by the $119.1 $118.2 $121.1 S&S and ESS acquisitions; organic revenue soft • Ended June 30, 2024 with ~840 sales reps. Q2 sales per rep per day productivity continued its imp
Slide 8: Gexpro Services – OEM Focus
Gexpro Services – OEM Focus Q2 2024 Highlights: Revenue (in millions) • Q2 organic revenue up $8.4M or 8.6% sequentially from Q1 $108.3 $107.1 2024. Strong Aerospace & Defense and Renewables end $98.7 markets drove sequential sales growth. Technology recovery continues. • Continued expansion in gros
Slide 9: TestEquity – Industrial Technologies Focus
TestEquity – Industrial Technologies Focus Q2 2024 Highlights: Revenue (in millions) • Q2 Revenue +45.1% or $61.4M YoY primarily driven by Hisco acquisition offset by organic revenue decline of 9.2% or $9.9M. $197.5 $187.1 Sequential sales up $10.4M or 5.5% over Q1 on continued Test & $136.1 Measure
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 $448.3M 3.6x Leverage(1) at April 1, 2022 Merger Close ~$210M Accounts $235.8M Receivable $320.7M Inventory ò 3.2x $(108.2)M Accounts Payable Lever
Slide 11: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Q2 '24 3.2x(2) Net Debt Leverage Q2'24 trade working capital $448M TTM Free Cash Flow(1) Conversion TTM cash flows from operating of ~110% activities of $103M TTM ROIC of ~12%(3) 6 highly commercially strategic & 47.6M shares outstanding accretive, high ROIC
Slide 12: 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 13: Summary
Summary • Strong sequential progress despite tough sales comps; improved sales in many end markets including Test & Measurement, Renewables, Technology and project related business. • Process and structural optimization initiatives for each business unit well underway. • Q2 results driven primarily
Slide 14: Appendix
5SG DISTRIBUTION 2 SOLUTIONS GROUP_/“ Appendix 14
Slide 15: Q2 2024 Consolidated Financial Highlights
Q2 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-Q2 2024 period. Adjusted Revenue
Slide 16: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q2 Revenue and Adjusted EBITDA Reconciliation ($000s) (Unaudited) Lawson Products Gexpro Services TestEquity All Other Eliminations Consolidated DSG Quarter Ended Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Revenue
Slide 17: 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 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Revenue $ 377,984 $ 438,909 $ 405,239 $ 416,086 $ 439,536 Pre-acqui
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 acquisitions prior to their acquisition dates not in reported GAAP results (2) Transaction and integration costs related to acquisitions (3) Expense
Slide 19: 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 Q2 2024 Q2 2023(3),(4) Q4 2023 Amount Diluted EPS(2) Amount Diluted EPS(2) Amount
Distribution Solutions Group — Q2 2024 Earnings Presentation on 6ix