Distribution Solutions Group Announces 2023 Full Year and Fourth Quarter Results

About this update from Distribution Solutions Group, Inc.

[{"type":"text","content":" \n 2023 Revenue Grew to $1.6 Billion , Generating $102 Million of Operating Cash \n\n \n FORT WORTH, Texas --(BUSINESS WIRE)--\n Distribution Solutions Group, Inc. (NASDAQ:DSGR) (\"DSG\" or the \"Company\") , a premier specialty distribution company, today announced consolidated results for the 2023 full year and fourth quarter ended December 31, 2023 . This press release is supplemented by an earnings presentation at https://investor.distributionsolutionsgroup.com/news/events .\n\n \n Bryan King , CEO and Chairman of the Board said, “By most any standard, 2023 was a very successful year for Distribution Solutions Group . The Company's profitability grew significantly while also generating over $102 million of cash from operations. We expanded topline revenue to $1.6 billion , up more than 36%. Comparable sales, including Lawson for all periods, increased almost 24% for the full year despite a choppy sales environment in a few end markets, resulting in 3% organic growth. On a two-year stacked basis, organic revenue grew by almost 17%. For the full year, we ended with $157 million in adjusted EBITDA, up nearly 28%, and our adjusted EBITDA margins were 10.0%, a testament to DSG's ability to create value by broadening our scale and footprint.\n\n \n“2023 reflects an acceleration of growth through a disciplined execution of our strategic initiatives with accretive acquisitions, organic growth and the successful roll-out of key operational initiatives. We took deliberate actions in 2023 to improve the return profile of the Company and create long-term enterprise value through a disciplined capital allocation strategy. This strategy included the acquisition of Hisco and the related $100 million rights offering, the return of capital to shareholders through an expanded share repurchase plan and our continuous focus of managing working capital to generate significant operating cash flows. As evidenced in 2023, our asset-light model that generates meaningful cash flow allows us to re-invest into high ROI initiatives and accretive acquisitions as we further drive long-term shareholder value.\n\n \n“Fourth quarter revenue grew by 23% primarily due to acquired revenue from Hisco. Although our organic revenue contracted by 6%, our two-year stacked organic revenue grew by 10%. The current quarter decline was primarily due to continued softness in the technology end-market, delayed maintenance spend most notable in the renewable end-market, and delayed capital spending in the current interest-rate sensitive environment. Excluding these end markets, organic revenue grew by approximately 1% in the fourth quarter. This gives us confidence that business headwinds are isolated to these categories, mostly within the OEM and Industrial Technology verticals. Macroeconomic impacts and seasonally fewer selling days negatively impacted the margin profile of certain verticals for the quarter,\" concluded Mr. King .\n\n \nThe following represents a summary of certain operating results (unaudited). See the reconciliations of GAAP to non-GAAP measures in Tables 2, 3 and 6.\n\n \n \n \n \n\n \n\n \n\n \n Twelve Months Ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Three Months Ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n(Dollars in thousands)\n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022(2) \n\n \n\n \n\n \n \n\n \n\n \n\n \n % Change \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n % Change \n\n \n\n \n\n \n \n \nRevenue\n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,570,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,151,422\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n36.4\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n405,239\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n328,850\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23.2\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nPro forma revenue(1)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,570,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,269,299\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n405,239\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n328,850\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23.2\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating income (loss)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n42,991\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n41,786\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2.9\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(289\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n12,658\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \nN/M\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNon-GAAP adjusted operating income(1)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n93,448\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n73,577\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n27.0\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17,608\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n20,131\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(12.5\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNon-GAAP adjusted EBITDA(1)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n157,036\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n123,028\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n27.6\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n33,880\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n34,003\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.4\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating income (loss) as a percent of revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3.6\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.1\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3.8\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdjusted EBITDA as a percent of pro forma revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.0\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8.4\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10.3\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(1) Full year 2022 results includes Lawson Products pre-merger results, other pro forma adjustments and certain non-operational or non-cash items\n\n \n\n \n\n \n \n \n(2) As a result of the April 1, 2022 strategic combination of Lawson Products , Gexpro Services and TestEquity , the Company's financial results are reported under reverse merger accounting treatment as required by generally accepted accounting principles (\"GAAP\"). Accordingly, Lawson Products results are included only for the periods following the April 1, 2022 merger closing date. GAAP results for the three and twelve months ended December 31, 2022 include the combined results of Gexpro Services and TestEquity , and the results of Lawson Products only subsequent to April 1, 2022 .\n\n \n\n \n\n \n \n 2023 Full Year Summary (1)\n\n \n \nRevenue was $1.57 billion , an increase of $419.0 million or 36.4% compared to 2022. On a comparable basis (including 12 months of Lawson in 2022), pro forma revenue grew 23.7%. Organic revenue grew 2.9% for 2023 versus 2022 and the remaining increase driven by acquisitions.\n\n \n \nOperating income increased $1.2 million from the prior year to $43.0 million , after the effect of non-cash acquired intangible amortization and $50.5 million of non-recurring acquisition related severance and retention costs, stock-based compensation and other non-recurring items. Adjusted operating income, excluding these non-cash and non-recurring items, grew 27.0% to $93.4 million compared to $73.6 million in 2022.\n\n \n \nNon-GAAP adjusted EBITDA grew to $157.0 million in 2023, or 10.0% of revenue, compared to $123.0 million or 9.7% of comparable pro forma revenue in the prior year. As expected, Hisco's operations pressured the 2023 adjusted EBITDA margins by approximately 50bps.\n\n \n \nGAAP Diluted loss per share was $0.20 for the year compared to earnings per diluted share of $0.21 in the year-ago period. Non-GAAP adjusted diluted earnings per share was $1.42 compared to $1.47 in the prior year on higher weighted average shares of 44.9 million in 2023 versus 35.1 million in 2022.\n\n \n \nThe Company ended 2023 with total liquidity of $298 million , consisting of $99.6 million of cash (restricted and unrestricted) and $198.3 million of availability under its credit facility with net debt leverage of 2.9x. Uses of cash for 2023 included net capital expenditures of $18.7 million and share repurchases of $3.6 million at an average price of $26.09 .\n(1) See reconciliation of GAAP to non-GAAP measures in tables 3, 5 and 6.\nShare and per share data for all periods presented reflect two-for-one stock split.\n\n \n \n 2023 Fourth Quarter Summary (2)\n\n \n \nRevenue increased $76.4 million , or 23.2%, to $405.2 million which includes $97.3 million of incremental revenue from 2022 and 2023 acquisitions. Two-year stacked organic revenue in the fourth quarter for 2023 and 2022 increased 10% despite organic revenue softness in the 2023 fourth quarter being down 6.4%. The revenue headwinds were isolated to the technology end-market and project-related verticals that are both more sensitive to high interest rates connected to capital spending.\n\n \n \nOperating loss was $0.3 million , which included $10.4 million of non-cash acquired intangible amortization and $17.9 million of non-recurring severance (primarily acquisition related) and other acquisition-related retention costs, stock-based compensation and other non-recurring items as compared to operating income of $12.7 million in the prior year quarter. Adjusted operating income, excluding these non-cash and non-recurring items, was $17.6 million compared to $20.1 million in the year-ago quarter.\n\n \n \nGAAP Diluted loss per share was $0.35 for the quarter compared to diluted loss per share of $0.05 in the year-ago quarter on higher depreciation and amortization expenses and establishing a valuation allowance on certain deferred tax assets in 2023. Non-GAAP adjusted diluted earnings per share was $0.22 compared to $0.32 for the same period a year ago.\n\n \n \nAdjusted EBITDA was $33.9 million compared to $34.0 million in the prior year quarter. As expected, Hisco operations pressured adjusted EBITDA margins in the 2023 quarter by approximately 35bps.\n\n \n \nThe Board of Directors announced an increase of $25.0 million to the existing share repurchase program, expanding the Company's availability to $29.0 million at December 31, 2023 .\n(2) See reconciliation of GAAP to non-GAAP measures in tables 2, 4 and 6.\nShare and per share data for all periods presented reflect two-for-one stock split.\n\n \n \n Conference Call \n\n \n Distribution Solutions Group, Inc. will conduct a conference call with investors to discuss 2023 fiscal year and fourth quarter results at 9:00 a.m. Eastern Time on March 7, 2024 . The conference call is available by direct dial at 1-888-506-0062 in the U.S. or 1-973-528-0011 from outside of the U.S. The participant access code is 138589. A replay of the conference call will be available by telephone approximately two hours after completion of the call through March 21, 2024 . Callers can access the replay by dialing 1-877-481-4010 in the U.S. or 1-919-882-2331 outside the U.S. The passcode for the replay is 49593. A streaming audio of the call and an archived replay will also be available on the investor relations page of Distribution Solutions Group’s website. Presentations may be supplemented by a series of slides appearing on the company’s investor relations home page at https://investor.distributionsolutionsgroup.com/news/events .\n\n \n About Distribution Solutions Group, Inc. \n\n \n Distribution Solutions Group (“DSG”) is a premier multi-platform specialty distribution company providing high touch, value-added distribution solutions to the maintenance, repair & operations (MRO), the original equipment manufacturer (OEM) and the industrial technologies markets. DSG was formed through the strategic combination of Lawson Products , a leader in MRO distribution of C-parts, Gexpro Services, a leading global supply chain services provider to manufacturing customers, and TestEquity , a leader in electronic test & measurement solutions.\n\n \nThrough its collective businesses, DSG is dedicated to helping customers lower their total cost of operation by increasing productivity and efficiency with the right products, expert technical support and fast, reliable delivery to be a one-stop solution provider. DSG serves approximately 180,000 customers in several diverse end markets supported by approximately 3,700 dedicated employees and strong vendor partnerships. DSG ships from strategically located distribution and service centers to customers in North America , Europe , Asia , South America and the Middle East .\n\n \nFor more information on Distribution Solutions Group please visit www.distributionsolutionsgroup.com .\n\n \nThis release 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 risks and uncertainties. Terms such as “aim,” “anticipate,” “believe,” “contemplates,” “continues,” “could,” “ensure,” “estimate,” “expect,” “forecasts,” “if,” “intend,” “likely,” “may,” “might,” “objective,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “probable,” “project,” “shall,” “should,” “strategy,” “will,” “would,” and variations of them and other words and terms of similar meaning and expression (and the negatives of such words and terms) are intended to identify forward-looking statements. Forward-looking statements can also be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks, uncertainties and assumptions, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. DSG can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and DSG cautions readers not to place undue reliance on such statements, which speak only as of the date made. DSG undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Certain risks associated with DSG’s business are also discussed from time to time in the reports DSG files with the SEC , including DSG’s Annual Report on Form 10-K, DSG’s Quarterly Reports on Form 10-Q and DSG’s Current Reports on Form 8-K, which should be reviewed carefully. In addition, the following factors, among others, could cause actual outcomes and results to differ materially from those discussed in the forward-looking statements: (i) unanticipated difficulties, expenditures or any problems arising after combining the businesses of Lawson Products , TestEquity and Gexpro Services (the \"merger\"), which may result in DSG not operating as effectively and efficiently as expected; (ii) the risk that stockholder litigation in connection with the merger or any other acquisition or business combination completed by DSG or any of its subsidiaries results in significant costs of defense, indemnification and liability; and (iii) the risks that DSG may encounter difficulties integrating the business of DSG with the business of other companies that DSG has acquired or has otherwise combined with, that DSG may not achieve the anticipated synergies contemplated with respect to any such business or transactions and that certain assumptions with respect to such business or transactions could prove to be inaccurate.\n\n \n -TABLES FOLLOW- \n\n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Condensed Consolidated Balance Sheets \n\n \n\n \n\n \n \n \n(Dollars in thousands, except share data)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n \n \n \n \n \n \n\n \n\n \n\n \n December 31 ,\n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 ,\n 2022 \n\n \n\n \n\n \n \n \n ASSETS \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Current assets: \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCash and cash equivalents\n\n \n\n \n\n \n$\n\n \n\n \n\n \n83,931\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n24,554\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRestricted cash\n\n \n\n \n\n \n \n\n \n\n \n\n \n15,695\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n186\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccounts receivable, less allowances\n\n \n\n \n\n \n \n\n \n\n \n\n \n213,448\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n166,301\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventories\n\n \n\n \n\n \n \n\n \n\n \n\n \n315,984\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n264,374\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPrepaid expenses and other current assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n28,272\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,773\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Total current assets \n\n \n\n \n\n \n \n\n \n\n \n\n \n657,330\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n478,188\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nProperty, plant and equipment, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n113,811\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n64,395\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRental equipment, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n24,575\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n27,139\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Goodwill \n\n \n\n \n\n \n \n\n \n\n \n\n \n399,925\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n348,048\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDeferred tax asset, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n95\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n189\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nIntangible assets, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n253,834\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n227,994\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCash value of life insurance\n\n \n\n \n\n \n \n\n \n\n \n\n \n18,493\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,166\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRight of use operating lease assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n76,340\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,755\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n5,928\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,736\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Total assets \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,550,331\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,215,610\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n LIABILITIES AND STOCKHOLDERS’ EQUITY \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Current liabilities: \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccounts payable\n\n \n\n \n\n \n$\n\n \n\n \n\n \n98,674\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n80,486\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCurrent portion of long-term debt\n\n \n\n \n\n \n \n\n \n\n \n\n \n32,551\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n16,352\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCurrent portion of lease liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n13,549\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,964\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccrued expenses and other current liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n97,241\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n62,677\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Total current liabilities \n\n \n\n \n\n \n \n\n \n\n \n\n \n242,015\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n169,479\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLong-term debt, less current portion, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n535,881\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n395,825\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLease liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n67,065\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n39,828\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDeferred tax liability, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n18,326\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,834\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n25,443\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,649\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Total liabilities \n\n \n\n \n\n \n \n\n \n\n \n\n \n888,730\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n652,615\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Stockholders’ equity: \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPreferred stock, $1 par value:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAuthorized - 500,000 shares, issued and outstanding — None\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCommon stock, $1 par value:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAuthorized - 70,000,000 shares\n\n \n\n \nIssued - 47,535,618 and 39,460,724 shares, respectively\n\n \n\n \nOutstanding - 46,758,359 and 38,833,568 shares, respectively\n\n \n\n \n\n \n \n\n \n\n \n\n \n46,758\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n38,834\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCapital in excess of par value\n\n \n\n \n\n \n \n\n \n\n \n\n \n671,154\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n572,379\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRetained deficit\n\n \n\n \n\n \n \n\n \n\n \n\n \n(34,707\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(25,736\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \n Treasury stock – 777,259 and 627,156 shares, respectively\n\n \n\n \n\n \n \n\n \n\n \n\n \n(16,434\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(12,526\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nAccumulated other comprehensive income (loss)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(5,170\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(9,956\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \n Total stockholders’ equity \n\n \n\n \n\n \n \n\n \n\n \n\n \n661,601\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n562,995\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Total liabilities and stockholders’ equity \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,550,331\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,215,610\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Condensed Consolidated Statements of Operations \n\n \n\n \n\n \n \n \n(Dollars in thousands, except per share data)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n \n \n \n \n \n \n\n \n\n \n\n \n Three Months Ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n Twelve Months Ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRevenue\n\n \n\n \n\n \n$\n\n \n\n \n\n \n405,239\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n328,850\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,570,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,151,422\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCost of goods sold\n\n \n\n \n\n \n \n\n \n\n \n\n \n267,555\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n212,558\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,018,527\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n760,524\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Gross profit \n\n \n\n \n\n \n \n\n \n\n \n\n \n137,684\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n116,292\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n551,875\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n390,898\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nSelling, general and administrative expenses\n\n \n\n \n\n \n \n\n \n\n \n\n \n137,973\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n103,634\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n508,884\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n349,112\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Operating income (loss) \n\n \n\n \n\n \n \n\n \n\n \n\n \n(289\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,658\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n42,991\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n41,786\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInterest expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n(12,717\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(7,597\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(42,774\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(24,301\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nLoss on extinguishment of debt\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(3,395\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nChange in fair value of earnout liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n112\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4,431\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n758\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(483\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nOther income (expense), net\n\n \n\n \n\n \n \n\n \n\n \n\n \n(113\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(894\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(2,982\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(670\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Income (loss) before income taxes \n\n \n\n \n\n \n \n\n \n\n \n\n \n(13,007\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(264\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(2,007\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,937\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nIncome tax expense (benefit)\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,323\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,619\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,960\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,531\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Net income (loss) \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(16,330\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(1,883\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(8,967\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n7,406\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Basic income (loss) per share of common stock \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.35\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.05\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.20\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.22\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Diluted income (loss) per share of common stock \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.35\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.05\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.20\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.21\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nBasic weighted average shares outstanding\n\n \n\n \n\n \n \n\n \n\n \n\n \n46,804,556\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n38,816,834\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,868,862\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n34,291,870\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDiluted weighted average shares outstanding\n\n \n\n \n\n \n \n\n \n\n \n\n \n46,804,556\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n38,816,834\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,868,862\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n35,086,592\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Condensed Consolidated Statements of Cash Flows \n\n \n\n \n\n \n \n \n(Dollars in thousands)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n \n \n \n \n\n \n\n \n\n \n Twelve Months Ended December 31 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Operating activities \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet income (loss)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n(8,967\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n7,406\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdjustments to reconcile to net cash used in operating activities:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDepreciation and amortization\n\n \n\n \n\n \n \n\n \n\n \n\n \n63,588\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n45,186\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAmortization of debt issuance costs\n\n \n\n \n\n \n \n\n \n\n \n\n \n2,420\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,888\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nExtinguishment of debt\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,395\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nStock-based compensation\n\n \n\n \n\n \n \n\n \n\n \n\n \n7,940\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,448\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCompensation expense related to employee share purchases\n\n \n\n \n\n \n \n\n \n\n \n\n \n427\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDeferred income taxes\n\n \n\n \n\n \n \n\n \n\n \n\n \n(8,028\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(2,406\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nChange in fair value of earnout liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n(758\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n483\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nGain on sale of rental equipment\n\n \n\n \n\n \n \n\n \n\n \n\n \n(2,675\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(3,632\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nLoss on sale of property, plant and equipment\n\n \n\n \n\n \n \n\n \n\n \n\n \n294\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCharge for step-up of acquired inventory\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,582\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,866\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet realizable value adjustment and write-offs for obsolete and excess inventory\n\n \n\n \n\n \n \n\n \n\n \n\n \n8,990\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,608\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nBad debt expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n784\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n795\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nChanges in operating assets and liabilities, net of acquisitions:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccounts receivable\n\n \n\n \n\n \n \n\n \n\n \n\n \n18,020\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(21,771\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nInventories\n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,236\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(42,404\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nPrepaid expenses and other current assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n931\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,874\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nAccounts payable\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,048\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(8,839\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nAccrued expenses and other current liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n13,667\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,492\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther changes in operating assets and liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n259\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(3,670\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nNet cash provided by (used in) operating activities\n\n \n\n \n\n \n \n\n \n\n \n\n \n102,286\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(11,029\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \n Investing activities \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPurchases of property, plant and equipment\n\n \n\n \n\n \n \n\n \n\n \n\n \n(15,337\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(8,307\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nBusiness acquisitions, net of cash acquired\n\n \n\n \n\n \n \n\n \n\n \n\n \n(259,835\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(115,343\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nPurchases of rental equipment\n\n \n\n \n\n \n \n\n \n\n \n\n \n(9,341\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(11,794\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nProceeds from sale of rental equipment\n\n \n\n \n\n \n \n\n \n\n \n\n \n5,990\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,756\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet cash provided by (used in) investing activities\n\n \n\n \n\n \n \n\n \n\n \n\n \n(278,523\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(126,688\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \n Financing activities \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nProceeds from revolving lines of credit\n\n \n\n \n\n \n \n\n \n\n \n\n \n180,982\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n383,489\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPayments on revolving lines of credit\n\n \n\n \n\n \n \n\n \n\n \n\n \n(302,083\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(320,751\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nProceeds from term loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n305,000\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n445,630\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPayments on term loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n(26,375\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(335,305\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nDeferred financing costs\n\n \n\n \n\n \n \n\n \n\n \n\n \n(3,419\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(11,956\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nProceeds from rights offering, net of offering costs of $1,531 \n\n \n\n \n\n \n \n\n \n\n \n\n \n98,469\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRepurchase of common stock\n\n \n\n \n\n \n \n\n \n\n \n\n \n(3,619\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,940\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nShares repurchased held in treasury\n\n \n\n \n\n \n \n\n \n\n \n\n \n(287\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(520\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nProceeds from employees for share purchases\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,253\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPayment of financing lease principal\n\n \n\n \n\n \n \n\n \n\n \n\n \n(515\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(429\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nPayment of earnout\n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,000\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPayment on seller's note\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(9,757\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nNet cash provided by (used in) financing activities\n\n \n\n \n\n \n \n\n \n\n \n\n \n250,406\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n148,461\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nEffect of exchange rate changes on cash and cash equivalents\n\n \n\n \n\n \n \n\n \n\n \n\n \n717\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(675\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \n Increase (decrease) in cash, cash equivalents and restricted cash \n\n \n\n \n\n \n \n\n \n\n \n\n \n74,886\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,069\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCash, cash equivalents and restricted cash at beginning of period\n\n \n\n \n\n \n \n\n \n\n \n\n \n24,740\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14,671\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Cash, cash equivalents and restricted cash at end of period \n\n \n\n \n\n \n$\n\n \n\n \n\n \n99,626\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n24,740\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCash and cash equivalents\n\n \n\n \n\n \n$\n\n \n\n \n\n \n83,931\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n24,554\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRestricted cash\n\n \n\n \n\n \n \n\n \n\n \n\n \n15,695\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n186\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal cash, cash equivalents and restricted cash\n\n \n\n \n\n \n$\n\n \n\n \n\n \n99,626\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n24,740\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Table 1 - Selected Segment Financial Data \n\n \n\n \n\n \n \n \n(Dollars in thousands)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Three Months Ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Revenue: \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Lawson Products \n\n \n\n \n\n \n$\n\n \n\n \n\n \n109,807\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n108,029\n\n \n\n \n\n \n \n \nGexpro Services\n\n \n\n \n\n \n \n\n \n\n \n\n \n93,211\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n100,103\n\n \n\n \n\n \n \n \n TestEquity \n\n \n\n \n\n \n \n\n \n\n \n\n \n190,685\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n105,374\n\n \n\n \n\n \n \n \nOther\n\n \n\n \n\n \n \n\n \n\n \n\n \n13,236\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,344\n\n \n\n \n\n \n \n \nIntersegment revenue elimination\n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,700\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nTotal\n\n \n\n \n\n \n$\n\n \n\n \n\n \n405,239\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n328,850\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Operating income (loss): \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Lawson Products \n\n \n\n \n\n \n$\n\n \n\n \n\n \n5,140\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,746\n\n \n\n \n\n \n \n \nGexpro Services\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,516\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,317\n\n \n\n \n\n \n \n \n TestEquity \n\n \n\n \n\n \n \n\n \n\n \n\n \n(8,282\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,932\n\n \n\n \n\n \n \n \nOther\n\n \n\n \n\n \n \n\n \n\n \n\n \n(663\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n663\n\n \n\n \n\n \n \n \nTotal\n\n \n\n \n\n \n$\n\n \n\n \n\n \n(289\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n12,658\n\n \n\n \n\n \n \n \n \n DISTRIBUTION SOLUTIONS GROUP, INC. \n\n \n\n \n\n \n \n \n SEC REGULATION G GAAP RECONCILIATIONS \n\n \n\n \n\n \n \nThe Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company's management believes that certain non-GAAP financial measures may provide users of this financial information with additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflections of underlying trends of the business because they provide a comparison of historical information that includes for the year ended December 31, 2022 certain results of pre-merger Lawson Products and excludes for all periods certain non-operational or non-cash items that impact the overall comparability. See Tables below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2023 and 2022 and the years ended December 31, 2023 and 2022. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.\n\n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Table 2 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA \n\n \n\n \n\n \n \n \n Q4 2023 and Q4 2022 \n\n \n\n \n\n \n \n \n(Dollars in thousands)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Lawson Products \n\n \n\n \n\n \n \n\n \n\n \n\n \n Gexpro Services \n\n \n\n \n\n \n \n\n \n\n \n\n \n TestEquity \n\n \n\n \n\n \n \n\n \n\n \n\n \n All Other \n\n \n\n \n\n \n \n\n \n\n \n\n \n Eliminations \n\n \n\n \n\n \n \n\n \n\n \n\n \n Consolidated DSG \n\n \n\n \n\n \n \n \n Quarter Ended \n\n \n\n \n\n \n Q4 2023 \n\n \n\n \n\n \n Q4 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n Q4 2023 \n\n \n\n \n\n \n Q4 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n Q4 2023 \n\n \n\n \n\n \n Q4 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n Q4 2023 \n\n \n\n \n\n \n Q4 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n Q4 2023 \n\n \n\n \n\n \n Q4 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n Q4 2023 \n\n \n\n \n\n \n Q4 2022 \n\n \n\n \n\n \n \n \nRevenue from external customers\n\n \n\n \n\n \n$\n\n \n\n \n\n \n109,475\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n108,029\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n91,968\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n100,103\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n190,560\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n105,374\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n13,236\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n15,344\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n405,239\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n328,850\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nIntersegment revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n332\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,243\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n125\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,700\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRevenue\n\n \n\n \n\n \n$\n\n \n\n \n\n \n109,807\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n108,029\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n93,211\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n100,103\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n190,685\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n105,374\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n13,236\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n15,344\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(1,700\n\n \n\n \n\n \n)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n405,239\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n328,850\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating income (loss)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n5,140\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,746\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,516\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n4,317\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(8,282\n\n \n\n \n\n \n)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,932\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(663\n\n \n\n \n\n \n)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n663\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(289\n\n \n\n \n\n \n)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n12,658\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDepreciation and amortization\n\n \n\n \n\n \n \n\n \n\n \n\n \n4,407\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,063\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,026\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,196\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,315\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,055\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n524\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n558\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n16,272\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n13,872\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdjustments:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nMerger and acquisition related costs(1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n360\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n268\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,823\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n931\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,486\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n939\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,498\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,633\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nStock-based compensation(2)\n\n \n\n \n\n \n \n\n \n\n \n\n \n2,499\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,003\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,499\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,003\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nSeverance and acquisition related retention expenses(3)\n\n \n\n \n\n \n \n\n \n\n \n\n \n46\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n217\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n199\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n221\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,153\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,400\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n443\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory step-up(4)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n716\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n716\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther non-recurring(5)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(30\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n156\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n814\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n238\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n784\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n394\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNon-GAAP adjusted EBITDA\n\n \n\n \n\n \n$\n\n \n\n \n\n \n12,422\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,509\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n8,823\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n10,795\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,833\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n10,476\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n802\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,223\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n33,880\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n34,003\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating income (loss) as a percent of revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.5\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3.8\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.3\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4.3\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(5.0\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.3\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.1\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.8\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nAdjusted EBITDA as a percent of revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.3\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9.5\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.8\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6.2\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n9.9\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6.1\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n8.0\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8.4\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.3\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n \n(1)\n\n \n\n \n\n \nTransaction and integration costs related to the mergers and other acquisitions\n\n \n\n \n\n \n \n \n(2)\n\n \n\n \n\n \nExpense (benefit) primarily for stock-based compensation, of which a portion varies with the Company’s stock price\n\n \n\n \n\n \n \n \n(3)\n\n \n\n \n\n \nIncludes severance expense for actions taken in 2023 and 2022 not related to a formal restructuring plan and acquisition related retention expenses for the Hisco acquisition\n\n \n\n \n\n \n \n \n(4)\n\n \n\n \n\n \nInventory fair value step-up adjustment for Lawson resulting from the reverse merger acquisition accounting and acquisition accounting for additional acquisitions completed by Gexpro Services or TestEquity \n\n \n\n \n\n \n \n \n(5)\n\n \n\n \n\n \nOther non-recurring costs consist of non-capitalized deferred financing costs incurred in conjunction with the 2023 credit agreement amendment, certain non-recurring strategic projects and other non-recurring items\n\n \n\n \n\n \n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Table 3 - Reconciliation of GAAP Revenue to Pro Forma Revenue and \n\n \n\n \n GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA \n\n \n\n \n\n \n \n \n YTD 2023 and YTD 2022 \n\n \n\n \n\n \n \n \n(Dollars in thousands)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Lawson Products \n\n \n\n \n\n \n \n\n \n\n \n\n \n Gexpro Services \n\n \n\n \n\n \n \n\n \n\n \n\n \n TestEquity \n\n \n\n \n\n \n \n\n \n\n \n\n \n Other \n\n \n\n \n\n \n \n\n \n\n \n\n \n Eliminations \n\n \n\n \n\n \n \n\n \n\n \n\n \n Consolidated DSG \n\n \n\n \n\n \n \n \n Year Ended \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \nRevenue from external customers\n\n \n\n \n\n \n$\n\n \n\n \n\n \n468,379\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n324,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n404,490\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n385,326\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n641,643\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n392,358\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n55,890\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n48,955\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,570,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,151,422\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nIntersegment revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n332\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,243\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n125\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,700\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRevenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n468,711\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n324,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n405,733\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n385,326\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n641,768\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n392,358\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n55,890\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n48,955\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(1,700\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,570,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,151,422\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPre-merger revenue(1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n104,902\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,975\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n117,877\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPro forma revenue\n\n \n\n \n\n \n$\n\n \n\n \n\n \n468,711\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n429,685\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n405,733\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n385,326\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n641,768\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n392,358\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n55,890\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n61,930\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(1,700\n\n \n\n \n\n \n)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,570,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,269,299\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating income (loss)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n32,498\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n6,536\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n27,000\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n21,291\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(16,465\n\n \n\n \n\n \n)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,375\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(42\n\n \n\n \n\n \n)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,584\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n42,991\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n41,786\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPre-merger operating income(1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,096\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n980\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,076\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPro forma merger adjustments(2)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4,086\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4,086\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nPro forma operating income (loss)\n\n \n\n \n\n \n \n\n \n\n \n\n \n32,498\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n13,546\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n27,000\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,291\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(16,465\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n11,375\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(42\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,564\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n42,991\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n49,776\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDepreciation and amortization\n\n \n\n \n\n \n \n\n \n\n \n\n \n19,532\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14,716\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,986\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,175\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n26,002\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,480\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,068\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,080\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n63,588\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n49,451\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdjustments:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nMerger and acquisition related costs(3)\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,015\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,672\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,081\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,957\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,215\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,786\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,250\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,561\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,415\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nStock-based compensation(4)\n\n \n\n \n\n \n \n\n \n\n \n\n \n7,940\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4,237\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,940\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4,237\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nSeverance and acquisition related retention expenses(5)\n\n \n\n \n\n \n \n\n \n\n \n\n \n476\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,050\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n238\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n266\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,949\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,095\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n24,666\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,422\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory net realizable value adjustment(6)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,737\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,737\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory step-up(7)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,943\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n163\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,582\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n761\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,582\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,867\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther non-recurring(8)\n\n \n\n \n\n \n \n\n \n\n \n\n \n202\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,199\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n886\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n354\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,620\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,708\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,597\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNon-GAAP adjusted EBITDA\n\n \n\n \n\n \n$\n\n \n\n \n\n \n63,663\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n38,626\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n45,191\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n43,206\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n43,283\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n34,736\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n4,899\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n6,460\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n157,036\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n123,028\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating income (loss) as a percent of revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.9\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.0\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.5\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(2.6\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.9\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.1\n\n \n\n \n\n \n)%\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.3\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.6\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nAdjusted EBITDA as a percent of revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.6\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.9\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11.1\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.2\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n8.9\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8.8\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.2\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10.0\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nAdjusted EBITDA as a percent of pro forma revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.6\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n9.0\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11.1\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.2\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n8.9\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8.8\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.4\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10.0\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n9.7\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n \n(1)\n\n \n\n \n\n \nRepresents Lawson Products pre-merger revenue and operating income\n\n \n\n \n\n \n \n \n(2)\n\n \n\n \n\n \nRepresents Lawson Products pro forma adjustments related to the merger consisting primarily of amortization of intangibles and stock based compensation\n\n \n\n \n\n \n \n \n(3)\n\n \n\n \n\n \nTransaction and integration costs related to the mergers and other acquisitions\n\n \n\n \n\n \n \n \n(4)\n\n \n\n \n\n \nExpense (benefit) primarily for stock-based compensation, of which a portion varies with the Company’s stock price\n\n \n\n \n\n \n \n \n(5)\n\n \n\n \n\n \nIncludes severance expense for actions taken in 2023 and 2022, not related to a formal restructuring plan and acquisition related retention expenses for the Hisco acquisition\n\n \n\n \n\n \n \n \n(6)\n\n \n\n \n\n \nInventory net realizable value adjustment recorded to reduce inventory related to discontinued products where the anticipated net realizable value was lower than the cost reflected in our records\n\n \n\n \n\n \n \n \n(7)\n\n \n\n \n\n \nInventory fair value step-up adjustment for Lawson resulting from the reverse merger acquisition accounting and acquisition accounting for additional acquisitions completed by Gexpro Services or TestEquity \n\n \n\n \n\n \n \n \n(8)\n\n \n\n \n\n \nOther non-recurring costs consist of non-capitalized deferred financing costs incurred in conjunction with the 2023 credit agreement amendment, certain non-recurring strategic projects and other non-recurring items\n\n \n\n \n\n \n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Table 4 - Reconciliation of GAAP Net Income (Loss) and GAAP Diluted EPS to \n\n \n\n \n Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS \n\n \n\n \n\n \n \n \n(Dollars in thousands, except per share data)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Three Months Ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n December 31, 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31, 2022 (3)(4) \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Amount \n\n \n\n \n\n \n \n\n \n\n \n\n \n Diluted EPS(2) \n\n \n\n \n\n \n \n\n \n\n \n\n \n Amount \n\n \n\n \n\n \n \n\n \n\n \n\n \n Diluted EPS(2) \n\n \n\n \n\n \n \n \nNet income (loss)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n(16,330\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.35\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(1,883\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.05\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPretax adjustments:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nStock-based compensation\n\n \n\n \n\n \n \n\n \n\n \n\n \n2,499\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.05\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,003\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.05\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nMerger and acquisition related costs\n\n \n\n \n\n \n \n\n \n\n \n\n \n2,498\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.05\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,633\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.12\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAmortization of intangible assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n10,398\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.22\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,186\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.21\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nSeverance and acquisition related retention expenses\n\n \n\n \n\n \n \n\n \n\n \n\n \n11,400\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.24\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n443\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.01\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nChange in fair value of earnout liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n(112\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,431\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.11\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory step-up\n\n \n\n \n\n \n \n\n \n\n \n\n \n716\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.02\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther non-recurring\n\n \n\n \n\n \n \n\n \n\n \n\n \n784\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.02\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n394\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.01\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal pretax adjustments\n\n \n\n \n\n \n \n\n \n\n \n\n \n28,183\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.60\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,090\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.51\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTax effect on adjustments(1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(7,412\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.16\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(5,264\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.14\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nDeferred tax asset valuation allowance(5)\n\n \n\n \n\n \n \n\n \n\n \n\n \n6,144\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.13\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n124\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNon-GAAP adjusted net income\n\n \n\n \n\n \n$\n\n \n\n \n\n \n10,585\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.22\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n13,067\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.32\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n(1)\n\n \n\n \n\n \nThe estimated tax effect on the adjustments is determined by applying the jurisdictional rate of the originating territory of the non-GAAP adjustments.\n\n \n\n \n\n \n \n \n(2)\n\n \n\n \n\n \nPretax adjustments to diluted EPS calculated on 46.805 million and 38.817 million diluted shares for the fourth quarter of 2023 and 2022, respectively.\n\n \n\n \n\n \n \n \n(3)\n\n \n\n \n\n \nIn 2023, the Company changed the treatment of amortization of intangible assets and the deferred tax asset valuation allowance to be included in the calculation of Non-GAAP adjusted net income and Non-GAAP adjusted diluted EPS. The calculation of the tax effect on adjustments was revised to consider the jurisdictional rate of the originating territory of the non-GAAP adjustments. Prior periods have been adjusted to conform to current period presentation.\n\n \n\n \n\n \n \n \n(4)\n\n \n\n \n\n \nShare and per share data for all periods presented reflect two-for-one stock split.\n\n \n\n \n\n \n \n \n(5)\n\n \n\n \n\n \nRepresents expense related to the deferred tax asset valuation allowance from interest expense limitations under Section 163(j).\n\n \n\n \n\n \n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Table 5 - Reconciliation of GAAP Net Income (Loss) and GAAP Diluted EPS to \n\n \n\n \n Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS \n\n \n\n \n\n \n \n \n(Dollars in thousands, except per share data)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Twelve Months Ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n December 31, 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31, 2022 (3)(4) \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Amount \n\n \n\n \n\n \n \n\n \n\n \n\n \n Diluted EPS(2) \n\n \n\n \n\n \n \n\n \n\n \n\n \n Amount \n\n \n\n \n\n \n \n\n \n\n \n\n \n Diluted EPS(2) \n\n \n\n \n\n \n \n \nNet income (loss)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n(8,967\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.20\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n7,406\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.21\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPretax adjustments:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nStock-based compensation\n\n \n\n \n\n \n \n\n \n\n \n\n \n7,940\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.18\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,448\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.07\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nMerger and acquisition related costs\n\n \n\n \n\n \n \n\n \n\n \n\n \n11,561\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.26\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,441\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.44\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAmortization of intangible assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n40,263\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.90\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n29,097\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.83\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nSeverance and acquisition related retention expenses\n\n \n\n \n\n \n \n\n \n\n \n\n \n24,666\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.55\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,796\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.08\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nChange in fair value of earnout liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n(758\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.02\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n483\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.01\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLoss on extinguishment of debt\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,395\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.10\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory net realizable value adjustment\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,737\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.05\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory step-up\n\n \n\n \n\n \n \n\n \n\n \n\n \n3,582\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.08\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,867\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.08\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther non-recurring\n\n \n\n \n\n \n \n\n \n\n \n\n \n2,708\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.06\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,597\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.05\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal pretax adjustments\n\n \n\n \n\n \n \n\n \n\n \n\n \n89,962\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2.01\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n59,861\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1.71\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTax effect on adjustments(1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(23,660\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.53\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(15,684\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.45\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nDeferred tax asset valuation allowance\n\n \n\n \n\n \n \n\n \n\n \n\n \n6,144\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.14\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n124\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNon-GAAP adjusted net income\n\n \n\n \n\n \n$\n\n \n\n \n\n \n63,479\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1.42\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n51,707\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1.47\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n(1)\n\n \n\n \n\n \nThe estimated tax effect on the adjustments is determined by applying the jurisdictional rate of the originating territory of the non-GAAP adjustments.\n\n \n\n \n\n \n \n \n(2)\n\n \n\n \n\n \nPretax adjustments to diluted EPS calculated on 44.869 million and 35.087 million diluted shares for the twelve months ended December 31, 2023 and 2022, respectively.\n\n \n\n \n\n \n \n \n(3)\n\n \n\n \n\n \nIn 2023, the Company changed the treatment of amortization of intangible assets and the deferred tax asset valuation allowance to be included in the calculation of Non-GAAP adjusted net income and Non-GAAP adjusted diluted EPS. The calculation of the tax effect on adjustments was revised to consider the jurisdictional rate of the originating territory of the non-GAAP adjustments. Prior periods have been adjusted to conform to current period presentation.\n\n \n\n \n\n \n \n \n(4)\n\n \n\n \n\n \nShare and per share data for all periods presented reflect two-for-one stock split.\n\n \n\n \n\n \n \n \n(5)\n\n \n\n \n\n \nRepresents expense related to the deferred tax asset valuation allowance from interest expense limitations under Section 163(j).\n\n \n\n \n\n \n \n \n \n Distribution Solutions Group, Inc. \n\n \n\n \n\n \n \n \n Table 6 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted Operating Income \n\n \n\n \n\n \n \n \n(Dollars in thousands)\n\n \n\n \n\n \n \n \n(Unaudited)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n Three Months Ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n Twelve Months Ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \nOperating income (loss)\n\n \n\n \n\n \n$\n\n \n\n \n\n \n(289\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n12,658\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n42,991\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n41,786\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPre-merger operating income(1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,076\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPro forma merger adjustments(2)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4,086\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nPro forma operating income (loss)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(289\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,658\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n42,991\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n49,776\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nGross profit adjustments:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory step-up(3)\n\n \n\n \n\n \n \n\n \n\n \n\n \n716\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,582\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,867\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInventory net realizable value adjustment(4)\n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,737\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal gross profit adjustments\n\n \n\n \n\n \n \n\n \n\n \n\n \n716\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,582\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,604\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nSelling, general and administrative expenses adjustments:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nMerger and acquisition related costs(5)\n\n \n\n \n\n \n \n\n \n\n \n\n \n2,498\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,633\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,561\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,415\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nStock-based compensation(6)\n\n \n\n \n\n \n \n\n \n\n \n\n \n2,499\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,003\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,940\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(4,237\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nSeverance and acquisition related retention expenses(7)\n\n \n\n \n\n \n \n\n \n\n \n\n \n11,400\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n443\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n24,666\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,422\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther non-recurring(8)\n\n \n\n \n\n \n \n\n \n\n \n\n \n784\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n394\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,708\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,597\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal selling, general and administrative adjustments\n\n \n\n \n\n \n \n\n \n\n \n\n \n17,181\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,473\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,875\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,197\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal adjustments\n\n \n\n \n\n \n \n\n \n\n \n\n \n17,897\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,473\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n50,457\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,801\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNon-GAAP adjusted operating income\n\n \n\n \n\n \n$\n\n \n\n \n\n \n17,608\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n20,131\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n93,448\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n73,577\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n(1)\n\n \n\n \n\n \nRepresents Lawson Products pre-merger operating income\n\n \n\n \n\n \n \n \n(2)\n\n \n\n \n\n \nRepresents Lawson Products pro forma adjustments related to the merger consisting primarily of amortization of intangibles and stock based compensation\n\n \n\n \n\n \n \n \n(3)\n\n \n\n \n\n \nInventory fair value step-up adjustment for Lawson resulting from the reverse merger acquisition accounting and acquisition accounting for additional acquisitions completed by Gexpro Services or TestEquity \n\n \n\n \n\n \n \n \n(4)\n\n \n\n \n\n \nInventory net realizable value adjustment recorded to reduce inventory related to discontinued products where the anticipated net realizable value was lower than the cost reflected in our records\n\n \n\n \n\n \n \n \n(5)\n\n \n\n \n\n \nTransaction and integration costs related to the mergers and other acquisitions\n\n \n\n \n\n \n \n \n(6)\n\n \n\n \n\n \nExpense (benefit) primarily for stock-based compensation, of wh...

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