Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Jefferies Industrials Investor Conference 2023
22 slides from Distribution Solutions's conference presentation, Sep 6, 2023
Slide 1: Jefferies Industrials Investor Conference Presentation
NASDAQ: DSGR Jefferies Industrials Investor Conference Presentation September 6, 2023 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 Multi-platform specialty distribution company providing high touch, value-added distribution solutions to the MRO, the OEM and the Industrial Technologies markets 3% 4% 26% 33% TTM Adj 35% TTM Revenue Adj EBITDA 48% $1.8B (1) $171M (1) ( ( 23% 28% Other Q2 ‘23 Reve
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 Q2 ‘23 trade working capital Q2 ‘23 3.1x(2) Net Debt to $476M and to-date incremental Adjusted EBITDA Leverage investment in working capital of $37M, excluding Hisco Free Cash Flow (1) Conversion of acquisition 93% realized in Q2 ‘23 Invest in Core Pay Down D
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(3) Other 21% Before Disorganized Parts Room Increased Downtime & Lower Labor Utilization Manufacturing Construction 22% 8% Vendor
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 250,000 products PRODUCTS OVERVIEW DIVERSE END MARKETS(3) Electronic Production Test & Measurement Supplies (“EPS”) with Instrumentation (“T&M”) advanced digital capabilities Other, 25% Aer
Slide 10: Hisco At a Glance
Hisco At a Glance Business Overview Select Product Offering Mix(1) Largest Suppliers Leading broadline industrial supplies distribution business with integrated footprint 4% 3% Adhesives, Sealants & Tapes 4% across the United States, Canada, and Mexico 4% Soldering & Rework 4% Chemical & Cleaning
Slide 11: Q2 2023 Consolidated Financial Highlights
Q2 2023 Consolidated Financial Highlights Reported Revenue and Adjusted EBITDA • Revenue of $378.0M, an increase of $56.6M or +17.6% over year ago quarter; organic growth of +4.8% • Adjusted EBITDA of $40.1M with 10.6% margin; up 26.7% from Adjusted EBITDA of $31.7M with 9.9% margin a year ago quart
Slide 12: Q2 2023 Consolidated Financial Highlights
Q2 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 Q2 2022-Q2 2023 perio
Slide 13: Progress Since April 2022 Merger
Progress Since April 2022 Merger Performing at or above all underwriting objectives established prior to combination Superior Leadership Fully Executed Cost Enhanced Go-to- Expanded Channels- Incentives for Cross- Synergies for IT, Market Strategy to-Market Selling Insurance Sensitive to Economic De
Slide 14: 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 15: Investor Contacts
Investor Contacts Three Part Advisors, LLC (214) 872-2710 Steven Hooser shooser@threepa.com Sandy Martin smartin@threepa.com 15 DSG Investor Presentation
Slide 16: Appendix
Appendix DSG Investor Presentation
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q2 Revenue and Adjusted EBITDA Reconciliation ($000s) (Unaudited) 1. Merger transaction costs related to the negotiation, review and execution of the merger agreements relating to the business combination of Lawson Products, TestEquity and Gexpro Services and subsequ
Slide 18: 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 19 Results are presented on an Adjusted (Non-GAAP) and continuing operations basis 18
Slide 19: 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. Merger transaction costs related to the negotiation, review and e
Slide 20: Aligned and Tenured Leadership
Aligned and Tenured Leadership BOARD Governance & Strategy J. Bryan King Andrew Albert Steven Edelson Lee Hillman Mark Moon Bianca Rhodes Brad Wallace Robert Zamarripa DSG LEADERSHIP Capital Allocation & Operational Accountability J. Bryan King Brad Wallace Kim Carter Jacob Smith Ron Knutson Chairma
Slide 21: 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 22: 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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