Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Q4 2022 Earnings Presentation
18 slides from Distribution Solutions's earnings presentation, Mar 9, 2023
Slide 1: Q4 2022 Financial Results
NASDAQ: DSGR Q4 2022 Financial Results March 9, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement Cautionary Note Regarding Forward-Looking Statements This investor deck 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 and un
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. The complexities of Reverse Merger Accounting treatment makes GAAP comparisons difficult. Agenda • Q4 2022 Consolidated Highlights & Financial Results • Segment High
Slide 4: 2022 Full Year and Q4 Highlights
2022 Full Year and Q4 Highlights • Fiscal year GAAP Revenue of $1.15B, Operating Income of $42M and Adjusted EBITDA of $123M • Q4 GAAP Revenue of $329M, Operating Income of $13M and Adjusted EBITDA of $34M, on strong top-line and bottom-line growth with 4 fewer sales days than Q3 • Q4 comparable org
Slide 5: Q4 2022 Consolidated Financial Highlights
Q4 2022 Consolidated Financial Highlights Results Adjusted to Reflect Comparable Results Including Pre-Merger Lawson Products • Adjusted Revenue of $328.9M, an increase of $97.6M or +42.2% over year ago quarter; organic growth of +16.7% • Adjusted EBITDA of $34.0M with 10.3% margin; up 92.6% from $1
Slide 6: Q4 2022 Consolidated Financial Highlights
Q4 2022 Consolidated Financial Highlights Results Inclusive of Lawson Products and Other Acquisitions Pre-Merger Results • Adjusted Revenue 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 o
Slide 7: Operating Companies Discussion
Operating Companies Discussion 7
Slide 8: Lawson Products – MRO Focus
Lawson Products – MRO Focus Q4 2022 Highlights: Adjusted Revenue (in millions) • Prior year Q4 2021 results are pre 4/1/2022 Merger $108.0 $89.8 • Adjusted Revenue +20.3%; all organic growth- both price and volume • Price increases throughout 2022 being realized Q4 2021 Q4 2022 • Ended December 31,
Slide 9: Gexpro Services – OEM Focus
Gexpro Services – OEM Focus Q4 2022 Highlights: Revenue (in millions) • Revenue of $100.1M; up $33.6M or 50.5%; organic growth of 11.9% $100.1 • Q4 2022 revenue includes $26.3M of revenue from $66.5 2021 and 2022 acquisitions (Omni, NEF, SIS, Resolux, and Frontier). Integrations continuing strong •
Slide 10: TestEquity – Industrial Technologies Focus
TestEquity – Industrial Technologies Focus Q4 2022 Highlights: Revenue (in millions) • Revenue of $105.4M; up $42.7M or 68.0%; organic growth of 14.5% $105.4 • Q4 2022 revenue includes $33.9M of revenue $62.7 from 2021 and 2022 acquisitions (MCS, TEquipment, National Test Equipment and Instrumex). I
Slide 11: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Q4 '22 trade working capital $350M and to-date Q4 '22 3.1x Net Debt to incremental investment in Adjusted EBITDA Leverage working capital of $24M Invest in Core Pay Down Businesses Debt Balance Sheet focused on Highest ROIC Opportunities Bolt-on Buy Back Acqu
Slide 12: Financial Position and Capitalization Table
Financial Position and Capitalization Table Strong Balance Sheet and Capital Allocation Framework Capitalization Table as of 12/31 • Prudent leverage target of 3 - 4x Net Debt to Adjusted $000s Q4 2022 EBITDA Cash $ 24,554 • Trailing net debt to 2022 adjusted EBITDA leverage ratio Current Assets 453
Slide 13: Summary
Summary • Sequential margin improvement during 2022; expected continuing strong path on a combined basis • Q4 results driven by both organic growth and acquired revenue – aligns with growth strategy; combined 42.2% adjusted revenue growth • Improvement in Adjusted EBITDA margin to 10.3% • All three
Slide 14: Appendix
JSG visiRieurion » SOLUTIONS GROUP_“ Appendix 14
Slide 15: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q4 Adjusted Revenue and EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results Lawson Products Gexpro Services TestEquity Other Consolidated DSG Quarter Ended Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 20
Slide 16: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Fiscal Year Adjusted Revenue and EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results Lawson Products Gexpro Services TestEquity Other Consolidated DSG Year Ended 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 GAAP Revenue $ 324,78
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted Revenue and Adjusted EBITDA Reconciliation ($000s) Results Inclusive of Lawson Products Pre-Merger Results and Other Acquisitions – Pre-Acquisition Date Consolidated DSG Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 GAAP Revenue $ 129,221 $ 154,085 $ 321,336 $ 347
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 Lawson pre-Merger and Other Acquisitions prior to their acquisition dates not in reported GAAP results (2) Merger transaction costs related to the n
Distribution Solutions Group — Q4 2022 Earnings Presentation on 6ix