Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Q2 2023 Earnings Presentation
16 slides from Distribution Solutions's earnings presentation, Aug 3, 2023
Slide 1: Q2 2023 Financial Results
NASDAQ: DSGR Q2 2023 Financial Results August 3, 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. Agenda • Q2 2023 Consolidated Highlights & Financial Results • Segment Highlights & Financial Results • Q&A GAAP results reported under Reverse Merger Accounting. Co
Slide 4: Q2 Highlights
Q2 Highlights • Q2 Revenue of $378M, Operating Income of $14M and Adjusted EBITDA exceeded $40M • Q2 Revenue growth of 17.6% including organic revenue growth of 4.8% • Generated Adjusted EBITDA margin of 10.6%, an increase of $8.4M over our initial quarter as a combined company a year ago • GAAP EPS
Slide 5: Hisco Acquisition - Creating a More Unified Platform
Hisco Acquisition - Creating a More Unified Platform More closely aligns TestEquity to DSG and strengthens the overall organization's value proposition • Extended cross-sell opportunities • Expanded value-added capabilities across platform • Geographic pull-through deeper into Mexico and South Ameri
Slide 6: Operating Companies Update and Value Drivers
Operating Companies Update and Value Drivers 6
Slide 7: 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 8: Lawson Products – MRO Focus
Lawson Products – MRO Focus Q2 2023 Highlights: • Revenue +11.0%; all organic growth-driven by expanding and new customer relationships • Price increases throughout 2022 and 2023 being realized; volume up 2% in quarter • Ended June 30, 2023 with ~926 sales reps. Sales per rep per day productivity im
Slide 9: Gexpro Services – OEM Focus
Gexpro Services – OEM Focus Q2 2023 Highlights: • Revenue of $108.3M; up $8.5M or 8.5%; all organic growth • Integrations of prior acquisitions continuing strong • Value creation initiatives including DSG cross sell, acquisition synergies and expanded kitting offerings and E-commerce • Solid demand
Slide 10: TestEquity – Industrial Technologies Focus
TestEquity – Industrial Technologies Focus Q2 2023 Highlights: • Revenue of $136.1M; up $38.2M or 39.0%; driven from acquisitions • Q2 2023 revenue includes $43.4M of revenue from 2022 and 2023 acquisitions (TEquipment, National Test Equipment, Instrumex and Hisco). Integrations well underway • Soft
Slide 11: Financial Position and Capitalization Table
Financial Position and Capitalization Table Strong Balance Sheet and Capital Allocation Framework Capitalization Table as of June 30, 2023 • Disciplined approach to capital allocation, focused on $000s (Unaudited) Q2 2023 balance sheet strength and investment in highest ROIC Cash $ 44,244 opportunit
Slide 12: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Q2 '23 trade working capital Q2 '23 3.1x Net Debt to $476M and to-date Adjusted EBITDA Leverage incremental investment in working capital of $37M, Free Cash Flow (1) excluding Hisco acquisition Conversion of 93% realized in Q2 Balance Sheet focused on Highest
Slide 13: Summary
Summary • Solid Q2 results in line with expectations despite tougher comps over Q1; some moderation of end markets experienced • Q2 results driven by both organic growth and acquired revenue – aligns with growth strategy; combined 17.6% revenue growth • Improvement in Adjusted EBITDA by $8.4 million
Slide 14: Appendix
JSG DISTRIBUTION » SOLUTIONS GROUP_~ Appendix 14
Slide 15: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Q2 Revenue and Adjusted EBITDA Reconciliation ($000s) (Unaudited) Lawson Products Gexpro Services TestEquity All Other Consolidated DSG Quarter Ended Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 GAAP Revenue $ 119,147 $ 107,334 $ 10
Slide 16: 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 Quarter Ended Q2 2023 Q2 2022 Amount Diluted EPS(2) Amount Diluted EPS(2) Net inco
Distribution Solutions Group — Q2 2023 Earnings Presentation on 6ix