Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Southwest IDEAS Investor Conference 2022
21 slides from Distribution Solutions's conference presentation, Nov 16, 2022
Slide 1: Southwest IDEAS Investor Presentation
NASDAQ: DSGR Southwest IDEAS Investor Presentation November 16, 2022 DSG Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements Cautionary Note Regarding Forward-Looking Statements This presentation 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 an
Slide 3: About Distribution Solutions Group
About Distribution Solutions Group Premier, multi-platform distribution company with high touch, value-added distribution and supply chain solutions in MRO, OEM, Electronic Production Supplies and Test & Measurement markets 5% 6% 32% 30% 29% TTM 34% Adj Sales Adj EBITDA $1.3B (1) ( $114M (1) ( 29% 3
Slide 4: Why Own DSG: Investment Thesis
Why Own DSG: Investment Thesis NASDAQ: DSGR Proven, Best-in-Class Management Team with Clear Vision of Value Creation Large Addressable Markets Aggregating $57 billion with Multi-Channel, Diverse Distribution Multi-platform with Scale for Attractive Returns, Acceleration of Growth with Successful Re
Slide 5: Embedded Growth Opportunities
Embedded Growth Opportunities LEVERAGE PLATFORM ACROSS CUSTOMER BASE END MARKETS HAVE STRONG SECULAR TAIL WINDS Unique total customer value proposition + Monetize distinct capabilities across the platform + Collaborative selling across customer bases Onshoring + IoT Renewables Manufacturing Expand d
Slide 6: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Q3 ‘22 trade working capital $337M and to-date incremental Q3 ‘22 3.4x Leverage investment in working capital of $54M Invest in Core Pay Down Debt Businesses Balance Sheet focused on Highest ROIC Opportunities Bolt-on Acquisitions Buy Back Shares 8 highly str
Slide 7: Leading service-focused industrial MRO distributor providing product through a vendor managed inventory approach
Leading service-focused industrial MRO distributor providing product through a vendor managed inventory approach OPTIMIZED INVENTORY MANAGEMENT SYSTEM DIVERSE END MARKETS(1) Construction Other Services 9% Before Disorganized Parts Room 10% Government 6% Increased Downtime & Lower Labor Utilization T
Slide 8: Leading global supply chain Services and C-Parts provider of highly engineered specified products
Leading global supply chain Services and C-Parts provider of highly engineered specified products for manufacturing end users BLUE CHIP CUSTOMERS IN DIVERSE MARKETS GLOBAL LOCATIONS Renewables Semiconductor Power & Telecom Generation • USA - Global HQ • Denmark – Resolux HQ • Turkey • Canada – NEF H
Slide 9: Leading authorized distributors of electronics production supplies and Test & Measurement solutions
Leading authorized distributors of electronics production supplies and Test & Measurement solutions, with over 180,000 products PRODUCTS OVERVIEW DIVERSE END MARKETS(1) Medical, Energy/Power, All Other, 6% Electronic Production Test & Measurement 3% 2% Supplies (“EPS”) with Instrumentation (“T&M”) S
Slide 10: 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 o Organic growth of +15.4% (Approximately 9% from pricing actions) • Adjusted EBITDA o
Slide 11: 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 12: Progress Since April 2022 Merger
Progress Since April 2022 Merger At September 30th , performing at or above all underwriting objectives established prior to consolidation Superior Leadership Fully Executed Cost Enhanced Go-to- Expanded Channels- Incentives for Cross- Synergies for IT, Market Strategy to-Market Selling Insurance Se
Slide 13: Questions?
Questions? Visit our websites for more information www.lawsonproducts.com www.testequity.com www.gexproservices.com www.lkcmheadwater.com www.distributionsolutionsgroup.com DSG Investor Presentation
Slide 14: Investor Contacts
Investor Contacts Three Part Advisors, LLC (214) 872-2710 Steven Hooser shooser@threepa.com Sandy Martin smartin@threepa.com 14 DSG Investor Presentation
Slide 15: Appendix
Appendix DSG Investor Presentation
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 re
Slide 19: Aligned and Tenured Leadership
Aligned and Tenured Leadership BOARD Governance & Strategy J. Bryan King Andrew Albert Steven Edelson Lee Hillman Mark Moon Bianca Rhodes DSG LEADERSHIP Capital Allocation & Operational Accountability J. Bryan King Brad Wallace Kim Carter Jacob Smith Ron Knutson Chairman & CEO Partner Partner Partne
Slide 20: Historical Acquisitions
Historical Acquisitions COMPANY FOCUS STRATEGIC RATIONALE CLOSING DATE REVENUE (1) PURCHASE PRICE ▪ Expanded geographic coverage and expanded customer base with an additional Industrial ~22,000 customer locations January 2017 $45.1 $25.0 Technologies ▪ Complementary value-added products / services (
Slide 21: LKCM Headwater Introduction
LKCM Headwater Introduction SIGNIFICANT PRIVATE COMPANY DISTRIBUTION EXPERIENCE • LG - Leading distributor of fabricated hose, gaskets and belting for specialized and mission-critical applications • Private, employee-owned SEC-registered investment advisor • ESP - Value-added provider of mission-cri
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