Slide 1: 2023 Financial Results
NASDAQ: DSGR 2023 Financial Results March 7, 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 • 2023 Full Year and Q4 Consolidated Highlights & Financial Results • Segment Highlights & Financial Results • Q&A DSG's Board of Directors approved and decla
Slide 4: 2023 Year in Review
2023 Year in Review Demonstrated our ability to execute strategic goals; expanding revenues, margins, enterprise value, and generating significant operating cash flow • Accelerated growth through a disciplined execution of our M&A playbook ◦ Accretive acquisition and integration of Hisco underway •
Slide 5: 2023 Full Year and Q4 Highlights
2023 Full Year and Q4 Highlights • Full year revenue increased 36.4%; adjusted for Lawson pre-merger, comparable pro forma revenue increased 23.7% over 2022. • Q4 revenue up 23.2% from acquired revenue. Two-year stacked organic growth up 10% in Q4; Q4 2023 organic revenue down 6.4%. Technology end-m
Slide 6: 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 7: 2023 Consolidated Financial Highlights
2023 Consolidated Financial Highlights Reported Revenue and Adjusted EBITDA • Full year revenue of $1.57B, an increase of $419.0M or 36.4% over 2022; inclusive of Lawson pre-merger, pro forma revenue up $301.1M or 23.7% over 2022. • Q4 revenue of $405.2M; up $76.4M or 23.2% due to 2023 Hisco acquisi
Slide 8: Lawson Products – MRO Focus
Lawson Products – MRO Focus 2023 Highlights: Year-to-Date Adjusted Pro Forma • Pro forma revenue +9.1% or $39M YTD; all organic growth- EBITDA Revenue driven by pricing and expanding / new customer relationships (in millions) (in millions) $468.7 $429.7 • Strong sales realized in strategic, Kent Aut
Slide 9: Gexpro Services – OEM Focus
Gexpro Services – OEM Focus 2023 Highlights: Year-to-Date Adjusted • Revenue + 5.3% or $20.4M YTD; despite ~50% decline in EBITDA Revenue technology/semiconductor end-market. Excluding acquired (in millions) (in millions) businesses and technology end-market, 2023 up ~15% $43.2 $45.2 $385.3 $405.7 •
Slide 10: TestEquity – Industrial Technologies Focus
TestEquity – Industrial Technologies Focus 2023 Highlights: Year-to-Date Adjusted • Revenue +63.6% or $249.4M YTD; primarily driven by acquisitions; EBITDA Revenue organic revenue down 8.0% or $24.0M. Sales softness in core (in millions) (in millions) legacy business as T&M "capital" type project de
Slide 11: Other Financial Highlights
Other Financial Highlights Robust Net Working Capital Rapid Deleveraging via Earnings Growth and Free Cash Flow Total Liquidity Investment Generation $430.7M 3.6x ~$298M Leverage(1) at April 1, 2022 Merger Close Accounts $213.4M Receivable $316.0M Inventory ò 2.9x ~$102M $(98.7)M Accounts Payable Le
Slide 12: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Q4 '23 trade working capital Q4 '23 2.9x(2) Net Debt $431M Leverage Cash flows from operating activities of $102M in 2023 Free Cash Flow(1) Conversion ($28M in Q4 '23) of ~100% realized in 2023 10 highly strategic & $29.0M available for accretive tuck-in dist
Slide 13: Summary
Summary • Strong full year results despite tougher sales comps in 2nd half; softening of certain end-markets experienced. • Proactively re-baselining cost structure where appropriate. • Full year results driven primarily by acquired revenue – aligns with growth strategy; Q4 two-year organic growth o
Slide 14: Appendix
JSG visiRieurion » SOLUTIONS GROUP_“ Appendix 14
Slide 15: Q4 2023 Consolidated Financial Highlights
Q4 2023 Consolidated Financial Highlights Results Inclusive of Other Acquisitions 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 Q4 2022-Q4 2023 peri
Slide 16: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q4 Revenue and Adjusted EBITDA Reconciliation ($000s) (Unaudited) Lawson Products Gexpro Services TestEquity All Other Eliminations Consolidated DSG Quarter Ended Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Revenue
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Fiscal Year Pro Forma Revenue and Adjusted EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results Lawson Products Gexpro Services TestEquity Other Eliminations Consolidated DSG Year Ended 2023 2022 2023 2022 2023 2022 2023 2022 2023 202
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Fiscal Year Pro Forma Revenue and Adjusted EBITDA Reconciliation – Table Footnotes (1) Represents Lawson Products pre-merger revenue and operating income (2) Represents Lawson Products pro forma adjustments related to the merger consisting primarily of amortization o
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Revenue and Adjusted EBITDA Reconciliation ($000s) Results Inclusive of Other Acquisitions – Pre-Acquisition Date (Unaudited) Consolidated DSG Quarter Ended Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Revenue $ 328,850 $ 348,270 $ 377,984 $ 438,909 $ 405,239 Pre
Slide 20: 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 other acquisitions prior to their acquisition dates not in reported GAAP results (2) Transaction and integration costs related to the mergers and ot
Slide 21: 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 Q4 2023 Q4 2022(3) Full Year 2023 Full Year 2022(3) Diluted Diluted Diluted Dilute