Sign In  |  Register  |  About Menlo Park  |  Contact Us

Menlo Park, CA
September 01, 2020 1:28pm
7-Day Forecast | Traffic
  • Search Hotels in Menlo Park

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Distribution Solutions Group Announces Fiscal 2023 Second Quarter Results

Record Second Quarter Revenue Up 17.6%

Distribution Solutions Group, Inc. (NASDAQ:DSGR) ("DSG" or the "Company"), a 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, today announced consolidated results for the second quarter ended June 30, 2023. This press release is supplemented by an earnings slide deck appearing on the Company’s investor relations page at https://investor.distributionsolutionsgroup.com/news/events.

The following represents a summary of certain operating results (unaudited). See reconciliation of GAAP to non-GAAP measures in tables 2 and 3.

 

Three Months Ended

 

 

 

June 30,

 

 

(Dollars in thousands)

 

2023

 

 

 

2022

 

 

% Change

GAAP Revenue

$

377,984

 

 

$

321,336

 

 

17.6

%

GAAP Operating Income

$

13,776

 

 

$

4,113

 

 

234.9

%

GAAP Operating income as a percent of GAAP Revenue

 

3.6

%

 

 

1.3

%

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

40,100

 

 

$

31,653

 

 

26.7

%

 

 

 

 

 

 

Adjusted EBITDA as a percent of GAAP Revenue

 

10.6

%

 

 

9.9

%

 

 

Bryan King, CEO and Chairman of the Board, said, “Our business delivered outstanding results during the second quarter as total revenue grew by 17.6%. GAAP operating income more than tripled and adjusted EBITDA increased by $8.4 million or nearly 27%, representing 10.6% of revenue. We continued to expand our margin profile with strong execution and performance during the first half of 2023 driven by broad-based contributions across our market leading businesses. We continue to strategically focus on generating shareholder value by driving sales growth, improving profitability and generating incremental cash flow.

"Our second quarter included just over three weeks of Hisco results, which we acquired in June, and we are well underway integrating Hisco's business into DSG. Combining Hisco into our TestEquity business expands our customer base, geographic reach and product offerings while driving additional scale and cost synergies to the entire DSG platform.

"We are closely monitoring the demand environment in light of continued tightening of monetary policy to emphasize on growth segments to drive revenues. While certain end markets moderated somewhat during the second quarter, we continue to invest in those initiatives we believe will fuel profitable growth across the DSG companies. Our asset light business model, combined with our focus on growing operating cash flows and accelerating returns on invested capital, positions us well to enhance long-term shareholder value," concluded Mr. King.

Second Quarter Highlights (1)

  • GAAP revenue was $378.0 million, an increase of $56.6 million or 17.6%, which included $43.4 million of additional revenue from companies acquired in 2022 and 2023 other than Lawson Products.
  • GAAP operating income increased by $9.7 million from the prior year period to $13.8 million representing 3.6% of GAAP revenue. Adjusted EBITDA increased 26.7% from the prior year period to $40.1 million or 10.6% of revenue.
  • Diluted income per share was $0.14 for the quarter compared to a diluted loss per share of $0.23 in the year-ago quarter. Non-GAAP adjusted diluted earnings per share was $0.52 in the second quarter 2023 compared to $0.36 for the same period a year ago.
  • On June 8, 2023, DSG completed the acquisition of HIS Company, Inc., a Texas corporation (“Hisco”), for total purchase consideration of $270.4 million, net of acquired cash, with a potential additional cash earn-out payment and potential employee retention payments of $37.5 million, payable in cash or DSG common stock. DSG funded the transaction through a combination of our expanded credit facility and approximately $100 million of equity raised in a common stock rights offering to existing stockholders. Hisco sales following the completion of the acquisition in the quarter were approximately $28.0 million and is included in the TestEquity reportable segment.
  • The Company ended the quarter with $189.6 million of availability under its committed credit facility and $44.2 million of unrestricted cash on hand.

(1) See reconciliation of GAAP to non-GAAP measures in tables 2 and 3.

The following represents a summary of certain operating results for each reportable segment and our All Other category (unaudited). See reconciliation of GAAP to non-GAAP measures in tables 2 and 3.

 

Lawson Products

 

Gexpro Services

 

TestEquity

 

All Other

 

Consolidated DSG

(Dollars in thousands)

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

GAAP Revenue

$

119,147

 

$

107,334

 

 

$

108,274

 

$

99,792

 

 

$

136,067

 

$

97,874

 

 

$

14,496

 

$

16,336

 

 

$

377,984

 

$

321,336

 

GAAP Operating Income

$

8,470

 

$

(2,562

)

 

$

8,778

 

$

5,390

 

 

$

(3,182

)

$

471

 

 

$

(290

)

$

814

 

 

$

13,776

 

$

4,113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

16,070

 

$

9,405

 

 

$

13,142

 

$

11,915

 

 

$

9,493

 

$

8,647

 

 

$

1,395

 

$

1,686

 

 

$

40,100

 

$

31,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income as a percent of GAAP Revenue

 

7.1

%

 

(2.4

)%

 

 

8.1

%

 

5.4

%

 

 

(2.3

)%

 

0.5

%

 

 

(2.0

)%

 

5.0

%

 

 

3.6

%

 

1.3

%

Adjusted EBITDA as a percent of GAAP Revenue

 

13.5

%

 

8.8

%

 

 

12.1

%

 

11.9

%

 

 

7.0

%

 

8.8

%

 

 

9.6

%

 

10.3

%

 

 

10.6

%

 

9.9

%

Note Regarding Reverse Merger Accounting

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 six months ended June 30, 2022 include the combined results of Gexpro Services and TestEquity, and the results of Lawson Products only subsequent to April 1, 2022. GAAP results for the three and six months ended June 30, 2023 include the results of Lawson Products, Gexpro Services and TestEquity.

Conference Call

Distribution Solutions Group, Inc. will conduct a conference call with investors to discuss second quarter 2023 results at 9:00 a.m. Eastern Time on August 3, 2023. 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 360415. A replay of the conference call will be available by telephone approximately two hours after completion of the call through August 17, 2023. 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 48695. 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.

About Distribution Solutions Group, Inc.

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.

Through 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 170,000 customers in several diverse end markets supported by approximately 3,800 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.

For more information on Distribution Solutions Group please visit www.distributionsolutionsgroup.com.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. The terms “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 other words and terms of similar meaning and expression 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. 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 or expenditures relating to the mergers; (ii) the risk that stockholder litigation in connection with the mergers results in significant costs of defense, indemnification and liability; (iii) any problems arising in combining the businesses of Lawson Products, TestEquity and Gexpro Services, which may result in the combined company not operating as effectively and efficiently as expected; and (iv) the risks that DSG may encounter difficulties integrating the business of DSG and Hisco, that DSG may not achieve the anticipated synergies contemplated with respect to the transaction and that certain assumptions with respect to Hisco's business or the transaction could prove to be inaccurate.

-TABLES FOLLOW-

Distribution Solutions Group, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands, except share data)

(Unaudited)

 

 

June 30,

2023

 

December 31,

2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

44,244

 

 

$

24,554

 

Restricted cash

 

20,607

 

 

 

186

 

Accounts receivable, less allowances

 

238,705

 

 

 

166,301

 

Inventories, net

 

326,236

 

 

 

264,374

 

Prepaid expenses and other current assets

 

32,999

 

 

 

22,773

 

Total current assets

 

662,791

 

 

 

478,188

 

Property, plant and equipment, net

 

113,329

 

 

 

64,395

 

Rental equipment, net

 

27,106

 

 

 

27,139

 

Goodwill

 

398,663

 

 

 

348,048

 

Deferred tax asset

 

7

 

 

 

189

 

Intangible assets, net

 

277,537

 

 

 

227,994

 

Cash value of life insurance

 

17,628

 

 

 

17,166

 

Right of use operating lease assets

 

65,772

 

 

 

46,755

 

Other assets

 

7,246

 

 

 

5,736

 

Total assets

$

1,570,079

 

 

$

1,215,610

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

88,977

 

 

$

80,486

 

Current portion of long-term debt

 

32,386

 

 

 

16,352

 

Current portion of lease liabilities

 

12,836

 

 

 

9,964

 

Accrued expenses and other current liabilities

 

92,999

 

 

 

62,677

 

Total current liabilities

 

227,198

 

 

 

169,479

 

Long-term debt, less current portion, net

 

558,845

 

 

 

395,825

 

Lease liabilities

 

57,735

 

 

 

39,828

 

Deferred tax liability

 

25,905

 

 

 

23,834

 

Other liabilities

 

24,403

 

 

 

23,649

 

Total liabilities

 

894,086

 

 

 

652,615

 

Stockholders’ equity:

 

 

 

Preferred stock, $1 par value:

 

 

 

Authorized - 500,000 shares, issued and outstanding — None

 

 

 

 

 

Common stock, $1 par value:

 

 

 

Authorized - 35,000,000 shares

Issued - 23,667,064 and 19,730,362 shares, respectively

Outstanding - 23,349,735 and 19,416,784 shares, respectively

 

23,350

 

 

 

19,417

 

Capital in excess of par value

 

688,983

 

 

 

591,796

 

Retained deficit

 

(16,809

)

 

 

(25,736

)

Treasury stock – 317,329 and 313,578 shares, respectively

 

(12,697

)

 

 

(12,526

)

Accumulated other comprehensive (loss) income

 

(6,834

)

 

 

(9,956

)

Total stockholders’ equity

 

675,993

 

 

 

562,995

 

Total liabilities and stockholders’ equity

$

1,570,079

 

 

$

1,215,610

 

Distribution Solutions Group, Inc.

Condensed Consolidated Statements of Operations

(Dollars in thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Revenue

$

377,984

 

 

$

321,336

 

 

$

726,254

 

 

$

475,421

 

Cost of goods sold

 

241,961

 

 

 

206,781

 

 

 

457,360

 

 

 

319,982

 

Gross profit

 

136,023

 

 

 

114,555

 

 

 

268,894

 

 

 

155,439

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

122,247

 

 

 

110,442

 

 

 

238,397

 

 

 

148,338

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

13,776

 

 

 

4,113

 

 

 

30,497

 

 

 

7,101

 

 

 

 

 

 

 

 

 

Interest expense

 

(9,492

)

 

 

(3,751

)

 

 

(17,162

)

 

 

(10,607

)

Loss on extinguishment of debt

 

 

 

 

(2,814

)

 

 

 

 

 

(3,395

)

Change in fair value of earnout liabilities

 

36

 

 

 

(5,693

)

 

 

(21

)

 

 

(5,693

)

Other income (expense), net

 

(761

)

 

 

(182

)

 

 

(1,736

)

 

 

774

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

3,559

 

 

 

(8,327

)

 

 

11,578

 

 

 

(11,820

)

Income tax expense (benefit)

 

535

 

 

 

(3,612

)

 

 

2,647

 

 

 

(4,568

)

 

 

 

 

 

 

 

 

Net income (loss)

$

3,024

 

 

$

(4,715

)

 

$

8,931

 

 

$

(7,252

)

 

 

 

 

 

 

 

 

Basic income (loss) per share of common stock

$

0.14

 

 

$

(0.23

)

 

$

0.42

 

 

$

(0.47

)

 

 

 

 

 

 

 

 

Diluted income (loss) per share of common stock

$

0.14

 

 

$

(0.23

)

 

$

0.41

 

 

$

(0.47

)

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

21,810,618

 

 

 

20,343,028

 

 

 

21,467,599

 

 

 

15,347,943

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

21,997,507

 

 

 

20,343,028

 

 

 

21,652,609

 

 

 

15,347,943

 

Distribution Solutions Group, Inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

Operating activities

 

 

 

Net income (loss)

$

8,931

 

 

$

(7,252

)

Adjustments to reconcile to net cash used in operating activities:

 

 

 

Depreciation and amortization

 

30,306

 

 

 

22,335

 

Amortization of debt issue costs

 

1,002

 

 

 

421

 

Extinguishment of debt

 

 

 

 

3,395

 

Stock-based compensation

 

4,392

 

 

 

4,013

 

Deferred income taxes

 

86

 

 

 

(420

)

Change in fair value of earnout liabilities

 

21

 

 

 

5,693

 

Gain on sale of rental equipment

 

(1,377

)

 

 

(1,821

)

Loss on sale of property, plant and equipment

 

215

 

 

 

 

Charge for step-up of acquired inventory

 

716

 

 

 

 

Net realizable value and reserve adjustment for obsolete and excess inventory

 

 

 

 

1,377

 

Bad debt expense

 

933

 

 

 

244

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(4,799

)

 

 

(27,639

)

Inventories

 

962

 

 

 

(28,983

)

Prepaid expenses and other current assets

 

(6,405

)

 

 

(13,777

)

Accounts payable

 

(8,936

)

 

 

(5,254

)

Accrued expenses and other current liabilities

 

(624

)

 

 

9,957

 

Other changes in operating assets and liabilities

 

2,041

 

 

 

(1,832

)

Net cash provided by (used in) operating activities

 

27,464

 

 

 

(39,543

)

Investing activities

 

 

 

Purchases of property, plant and equipment

 

(7,796

)

 

 

(3,410

)

Business acquisitions, net of cash acquired

 

(252,007

)

 

 

(113,781

)

Purchases of rental equipment

 

(5,990

)

 

 

(4,878

)

Proceeds from sale of rental equipment

 

2,969

 

 

 

6,783

 

Net cash provided by (used in) investing activities

 

(262,824

)

 

 

(115,286

)

Financing activities

 

 

 

Proceeds from revolving lines of credit

 

161,684

 

 

 

166,200

 

Payments on revolving lines of credit

 

(274,134

)

 

 

(67,687

)

Proceeds from term loans

 

305,000

 

 

 

377,552

 

Payments on term loans

 

(11,250

)

 

 

(307,490

)

Deferred financing costs

 

(3,419

)

 

 

(11,415

)

Proceeds from rights offering, net of offering costs of $1,531

 

98,469

 

 

 

 

Shares repurchased held in treasury

 

(171

)

 

 

(78

)

Payment of financing lease principal

 

(249

)

 

 

(39

)

Payment of earnout

 

(1,000

)

 

 

 

Net cash provided by (used in) financing activities

 

274,930

 

 

 

157,043

 

Effect of exchange rate changes on cash and cash equivalents

 

541

 

 

 

1,181

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

40,111

 

 

 

3,395

 

Cash, cash equivalents and restricted cash at beginning of period

 

24,740

 

 

 

14,671

 

Cash, cash equivalents and restricted cash at end of period

$

64,851

 

 

$

18,066

 

Cash and cash equivalents

$

44,244

 

 

$

17,872

 

Restricted cash

 

20,607

 

 

 

194

 

Total cash, cash equivalents and restricted cash

$

64,851

 

 

$

18,066

 

Distribution Solutions Group, Inc.

Table 1 - Selected Segment Financial Data

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

Three Months Ended

 

June 30,

 

 

2023

 

 

 

2022

 

Revenue:

 

 

 

Lawson Products

$

119,147

 

 

$

107,334

 

Gexpro Services

 

108,274

 

 

 

99,792

 

TestEquity

 

136,067

 

 

 

97,874

 

Other

 

14,496

 

 

 

16,336

 

Total

$

377,984

 

 

$

321,336

 

 

 

 

 

Operating Income:

 

 

 

Lawson Products

$

8,470

 

 

$

(2,562

)

Gexpro Services

 

8,778

 

 

 

5,390

 

TestEquity

 

(3,182

)

 

 

471

 

Other

 

(290

)

 

 

814

 

Total

$

13,776

 

 

$

4,113

 

DISTRIBUTION SOLUTIONS GROUP, INC.

SEC REGULATION G GAAP RECONCILIATIONS

The 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 excludes for all periods certain non-operational 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 June 30, 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.

Distribution Solutions Group, Inc.

Table 2 - Reconciliation of GAAP Operating Income to Non-GAAP Adjusted EBITDA

Q2 2023 and Q2 2022

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lawson Products

 

Gexpro Services

 

TestEquity

 

All Other

 

Consolidated DSG

Quarter Ended

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

 

Q2 2023

Q2 2022

GAAP Revenue

$

119,147

 

$

107,334

 

 

$

108,274

 

$

99,792

 

 

$

136,067

 

$

97,874

 

 

$

14,496

 

$

16,336

 

 

$

377,984

 

$

321,336

 

GAAP Operating Income

$

8,470

 

$

(2,562

)

 

$

8,778

 

$

5,390

 

 

$

(3,182

)

$

471

 

 

$

(290

)

$

814

 

 

$

13,776

 

$

4,113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

4,498

 

 

4,522

 

 

 

4,026

 

 

4,093

 

 

 

5,560

 

 

5,761

 

 

 

500

 

 

370

 

 

 

14,584

 

 

14,746

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/integration costs(1)

 

 

 

1,818

 

 

 

150

 

 

2,160

 

 

 

 

 

1,812

 

 

 

 

 

 

 

 

150

 

 

5,790

 

Stock-based compensation(2)

 

2,188

 

 

4,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,188

 

 

4,013

 

Severance and acquisition related retention expenses(3)

 

119

 

 

449

 

 

 

23

 

 

45

 

 

 

2,295

 

 

458

 

 

 

 

 

1

 

 

 

2,437

 

 

953

 

Acquisition related costs(4)

 

651

 

 

 

 

 

153

 

 

189

 

 

 

4,104

 

 

145

 

 

 

 

 

 

 

 

4,908

 

 

334

 

Inventory step-up(5)

 

 

 

1,165

 

 

 

 

 

 

 

 

716

 

 

 

 

 

 

 

457

 

 

 

716

 

 

1,622

 

Other non-recurring(6)

 

144

 

 

 

 

 

12

 

 

38

 

 

 

 

 

 

 

 

1,185

 

 

44

 

 

 

1,341

 

 

82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

16,070

 

$

9,405

 

 

$

13,142

 

$

11,915

 

 

$

9,493

 

$

8,647

 

 

$

1,395

 

$

1,686

 

 

$

40,100

 

$

31,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income as a percent of GAAP Revenue

 

7.1

%

 

(2.4

)%

 

 

8.1

%

 

5.4

%

 

 

(2.3

)%

 

0.5

%

 

 

(2.0

)%

 

5.0

%

 

 

3.6

%

 

1.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA as a percent of GAAP Revenue

 

13.5

%

 

8.8

%

 

 

12.1

%

 

11.9

%

 

 

7.0

%

 

8.8

%

 

 

9.6

%

 

10.3

%

 

 

10.6

%

 

9.9

%

(1)

Merger transaction costs related to the negotiation, review and execution of the merger agreements relating to the business combination of Lawson Products, TestEquity and Gexpro Services and subsequent integration costs

(2)

Expense primarily for stock-based compensation, of which a portion varies with the Company’s stock price

(3)

Includes 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

(4)

Expense for acquisition related costs, unrelated to the business combination of Lawson Products, TestEquity and Gexpro Services

(5)

Inventory fair value step-up adjustment for Lawson resulting from the reverse merger acquisition accounting

(6)

Other 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

Distribution Solutions Group, Inc.

Table 3 - Reconciliation of GAAP Net Income (Loss) and GAAP Diluted EPS to

Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS

(Dollars in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

June 30, 2023

 

June 30, 2022

 

Amount

 

Diluted

EPS(2)

 

Amount

 

Diluted

EPS(2)

Net income (loss) as reported per GAAP

$

3,024

 

 

$

0.14

 

 

$

(4,715

)

 

$

(0.23

)

 

 

 

 

 

 

 

 

Pretax adjustments:

 

 

 

 

 

 

 

Acquisition related costs

 

4,908

 

 

 

0.22

 

 

 

334

 

 

 

0.02

 

Stock-based compensation

 

2,188

 

 

 

0.10

 

 

 

4,013

 

 

 

0.20

 

Merger/integration costs

 

150

 

 

 

0.01

 

 

 

5,790

 

 

 

0.28

 

Severance and acquisition related retention expenses

 

2,437

 

 

 

0.11

 

 

 

953

 

 

 

0.05

 

Change in fair value of earnout liabilities

 

(36

)

 

 

 

 

 

5,693

 

 

 

0.28

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

2,814

 

 

 

0.14

 

Inventory step-up

 

716

 

 

 

0.03

 

 

 

1,622

 

 

 

0.08

 

Other non-recurring

 

1,341

 

 

 

0.06

 

 

 

82

 

 

 

 

Total pretax adjustments

 

11,704

 

 

 

0.53

 

 

 

21,301

 

 

 

1.05

 

Tax effect on adjustments(1)

 

(3,394

)

 

 

(0.15

)

 

 

(9,245

)

 

 

(0.46

)

Total adjustments, net of tax

 

8,310

 

 

 

0.38

 

 

 

12,056

 

 

 

0.59

 

Non-GAAP adjusted net income

$

11,334

 

 

$

0.52

 

 

$

7,341

 

 

$

0.36

 

(1)

Tax effected at quarterly tax rate of 29.0% and 43.4% for the three months ended June 30, 2023 and 2022, respectively, excluding discrete items.

(2)

Pretax adjustments to diluted EPS calculated on 21.998 million and 20.343 million diluted shares for the second quarter of 2023 and 2022, respectively.

 

Contacts

Investor Relations:

Distribution Solutions Group, Inc.

Ronald J. Knutson

Executive Vice President, Chief Financial Officer and Treasurer

773-304-5665

Investor Relations Contacts:

Three Part Advisors, LLC

Steven Hooser / Sandy Martin

214-872-2710 / 214-616-2207

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 MenloPark.com & California Media Partners, LLC. All rights reserved.