Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — 19th Annual Barrington Virtual Spring Investment Conference (May 2025)
31 slides from Distribution Solutions's conference presentation, May 29, 2025
Slide 1: 19th Annual Barrington Virtual Spring Investment Conference
NASDAQ: DSGR 19th Annual Barrington Virtual Spring Investment Conference May 29, 2025
Slide 2: Disclaimers
Disclaimers 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, Section 21E of the Securities Exchange Act of 1934, as amended, and the “safe-harbor” provisio
Slide 3: Presenters
Presenters Ron Knutson Brett Scarbrough EVP & CFO for Vice President, Strategy & DSG and Lawson Products Investor Relations for DSG 3
Slide 4: Leading Specialty Industrial Distribution Platform
Leading Specialty Industrial Distribution Platform MRO Focus OEM Focus Industrial Technologies Focus VMI Focus Canadian Branch Focus Leading vendor managed Leading wholesale distributor of Leading global supply chain services and Leading supplier of electronic and specialty inventory provider of C-p
Slide 5: Attractive Attributes of Specialty Distributors
Attractive Attributes of Specialty Distributors Business model that extends beyond conventional distribution – repeatedly demonstrating a clear, differentiated value proposition for customers Fortified competitive moat created by robust technical knowledge, extensive service capabilities, and/or
Slide 6: Value-Added Capabilities Drive Returns
Value-Added Capabilities Drive Returns Specialty Distribution Model Value-Added Offerings…Create High Customer Retention Human capital Technology & Specialty investment (P&L) Systems (B/S) offerings Coupled with working capital investment Drive higher ROIC & higher structural margins Vendor Managed
Slide 7: Cross-Company Collaboration
Cross-Company Collaboration The Power of Three Main Assembly Comprehensive product solutions supported by robust suite of value-added services Fasteners VMI Management Manufacturing & Assembly Labeling & Printing Slitting & Die Cutting Hydraulics Packaging & Kitting Value Engineering Che
Slide 8: DSG Delivers a Unique & Attractive Specialty Distribution Platform
DSG Delivers a Unique & Attractive Specialty Distribution Platform Significant Customer, Attractive, Accretive Strong, Sticky Role Dual Pronged Supplier & End Market Returns on in the Value Chain Growth Strategy Diversity Incremental Capital Customer-Embedded Serve 10+ Industries 180+ bps Ad
Slide 9: DSG Serves a Broad & Diverse Set of End Markets
DSG Serves a Broad & Diverse Set of End Markets Spotlight: Revenue and End Market Diversification A&D Industry – example of how DSG serves >200,000 customers customers up and down the value chain within various end markets: in a robust set of end markets R&D - TE | OEM - GS/TE/Hisco | MRO - Lawson/H
Slide 10: Value Creation Themes
Value Creation Themes Spotlight: Embedded Growth Opportunities Leverage Platform Across Customer Base Strong Secular Tailwinds Unique total customer value proposition + Onshoring / Infrastructure Monetize distinct capabilities across the platform Nearshoring (CHIPS Act) + Collaborative selling acros
Slide 11: MRO Focus: Overview
MRO Focus: Overview Business Unit Snapshot Products Fasteners Hydraulics MRO Focus 36% of Total Revenue(1) Chemicals Other broad offerings and C-Parts Cutting tools Safety OEM Focus Services Managed inventory Product recommendations Industrial vending Industrial Technologies Focus
Slide 12: OEM Focus: Overview
OEM Focus: Overview Business Unit Snapshot Comprehensive Supply Chain Solutions MRO Focus OEM Focus 24% of Total Revenue (1) Vendor Managed Kitting & Inventory (VMI) Aftermarket / Technology Industrial Technologies Focus Assembly Installation Diverse End Markets Renewables Technology Aerospace & Def
Slide 13: Industrial Technologies Focus: Overview
Industrial Technologies Focus: Overview Business Unit Snapshot Products Electronic Production Environmental Test MRO Focus Supplies Chambers Test & Measurement Chemicals & Adhesives OEM Focus Instrumentation Labels and Printing Services VMI Asset Management Industrial Technologies Focu
Slide 14: Compounding Effect of Cash Flow Reinvestment
Compounding Effect of Cash Flow Reinvestment Free Cash Flow Reinvesting in the Strategic M&A and bolt- business, balance sheet, on acquisitions and working capital Opportunistic buybacks Debt reduction and potential dividends Disciplined Capital Allocation Framework with a Healthy Competition for Ca
Slide 15: M&A Strategy: Acquisition Criteria
M&A Strategy Acquisition Criteria Strong organic Synergistic across the A clear integration Prioritizing Unique customer growth and potential platform while thesis to unlock North American value proposition for scale in attractive driving higher targeted value- footprint end markets structural margi
Slide 16: M&A Focus Areas
M&A Focus Areas Fasteners, Fabrication, Electricals, Electronic Production Supplies Safety, Cutting Tools, Automotive, Product Offering Mechanicals, Gaskets/Seals/O- Test & Measurement Fluid Power, Fasteners, Welding Rings, Hose Assemblies Calibration United States North America United States Expand
Slide 17: Q1 2025 Consolidated Financial Highlights
Q1 2025 Consolidated Financial Highlights Q1 revenue of $478M; up $62M or 14.9% over a year ago primarily from five acquisitions closed in 2024; down 0.5% sequentially over Q4. Organic average daily sales grew 4.3% (4.7% on a constant currency basis) over a year ago. Q1 adjusted EBITDA of $42.8M
Slide 18: Other Financial Highlights
Other Financial Highlights Organic Growth M&A Robust Net Working Capital Focus on Deleveraging via Earnings Return Capital to Investment Growth and Free Cash Flow Shareholders $495.6M Generation • Market share • Adding scale, • Authorized $37.5M growth footprint, $280.4 Accounts Receivable 3.6x shar
Slide 19: Highly Aligned Leadership / Governance
Highly Aligned Leadership / Governance J. Bryan King Ron Knutson DSG Chairman & CEO EVP and CFO Dedicated LKCM Headwater team LKCM HW Managing Partner Lawson and DSG investing significant time, resources and well aligned capital LAWSON PRODUCTS GEXPRO SERVICES TESTEQUITY GROUP Cesar Lanuza Bob Conno
Slide 20: 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
Slide 21: 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 22: Investor Contacts
Investor Contacts Three Part Advisors, LLC (214) 872-2710 Steven Hooser shooser@threepa.com Sandy Martin smartin@threepa.com 22 DSG Investor Presentation
Slide 23: Appendix
Appendix DSG Investor Presentation
Slide 24: Q1 2025 Consolidated Financial Highlights
Q1 2025 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 2024-Q1 2025 period. Adjusted Revenue
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q1 Revenue and Adjusted EBITDA Reconciliation ($000s) (Unaudited) 1. Transaction and integration costs related to acquisitions. 2. Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company’s stock price. 3. Includes severanc
Slide 26: 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) References to table footnotes on slide 27 Results are presented on an Adjusted (Non-GAAP) and continuing operations basis 26
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Revenue and EBITDA Reconciliation – Table Footnotes 27
Slide 28: 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) 1. The adjustment to the income tax expense (benefit) is determined by excluding the non-GAAP adjus
Slide 29: Historical Acquisitions
Historical Acquisitions COMPANY FOCUS STRATEGIC RATIONALE CLOSING DATE REVENUE (1) PURCHASE PRICE Industrial Expanded geographic coverage and expanded customer base with an additional ~22,000 customer locations January 2017 $45.1 $25.0 Technologies Complementary value-added products / services (
Slide 30: Historical Acquisitions (Continued)
Historical Acquisitions (Continued) COMPANY FOCUS STRATEGIC RATIONALE CLOSING DATE REVENUE (1) PURCHASE PRICE Leading global renewables supplier within the OEM segment OEM January 2022 $31.9 $38.0 Opened new strategic markets in Europe, the Middle East, and Asia Enhances B & C-class product an
Slide 31: Who We Are
Who We Are DSG is a best-in-class specialty distribution company providing high-touch, value-added distribution solutions to the MRO, OEM, and Industrial Technologies verticals in a diversified set of end markets. We take a solutions-based approach to serving our customers the way they want to be se