Date of Report (Date of earliest event reported): |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) | ||||||||||||||||
(Registrant's telephone number, including area code) |
Not Applicable | ||
(Former name or former address, if changed since last report) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
The (NASDAQ Global Select Market) |
DISTRIBUTION SOLUTIONS GROUP, INC. | |||||||||||
(Registrant) | |||||||||||
Date: | March 7, 2024 | By: /s/ Ronald J. Knutson | |||||||||
Name: Ronald J. Knutson | |||||||||||
Title: Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit Number | Description | |||||||
Twelve Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022(2) | % Change | 2023 | 2022 | % Change | |||||||||||||||||||||||||||||
Revenue | $ | 1,570,402 | $ | 1,151,422 | 36.4 | % | $ | 405,239 | $ | 328,850 | 23.2 | % | |||||||||||||||||||||||
Pro forma revenue(1) | $ | 1,570,402 | $ | 1,269,299 | 23.7 | % | $ | 405,239 | $ | 328,850 | 23.2 | % | |||||||||||||||||||||||
Operating income (loss) | $ | 42,991 | $ | 41,786 | 2.9 | % | $ | (289) | $ | 12,658 | N/M | ||||||||||||||||||||||||
Non-GAAP adjusted operating income(1) | $ | 93,448 | $ | 73,577 | 27.0 | % | $ | 17,608 | $ | 20,131 | (12.5) | % | |||||||||||||||||||||||
Non-GAAP adjusted EBITDA(1) | $ | 157,036 | $ | 123,028 | 27.6 | % | $ | 33,880 | $ | 34,003 | (0.4) | % | |||||||||||||||||||||||
Operating income (loss) as a percent of revenue | 2.7% | 3.6% | (0.1)% | 3.8% | |||||||||||||||||||||||||||||||
Adjusted EBITDA as a percent of pro forma revenue | 10.0% | 9.7% | 8.4% | 10.3% |
December 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 83,931 | $ | 24,554 | |||||||
Restricted cash | 15,695 | 186 | |||||||||
Accounts receivable, less allowances | 213,448 | 166,301 | |||||||||
Inventories | 315,984 | 264,374 | |||||||||
Prepaid expenses and other current assets | 28,272 | 22,773 | |||||||||
Total current assets | 657,330 | 478,188 | |||||||||
Property, plant and equipment, net | 113,811 | 64,395 | |||||||||
Rental equipment, net | 24,575 | 27,139 | |||||||||
Goodwill | 399,925 | 348,048 | |||||||||
Deferred tax asset, net | 95 | 189 | |||||||||
Intangible assets, net | 253,834 | 227,994 | |||||||||
Cash value of life insurance | 18,493 | 17,166 | |||||||||
Right of use operating lease assets | 76,340 | 46,755 | |||||||||
Other assets | 5,928 | 5,736 | |||||||||
Total assets | $ | 1,550,331 | $ | 1,215,610 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 98,674 | $ | 80,486 | |||||||
Current portion of long-term debt | 32,551 | 16,352 | |||||||||
Current portion of lease liabilities | 13,549 | 9,964 | |||||||||
Accrued expenses and other current liabilities | 97,241 | 62,677 | |||||||||
Total current liabilities | 242,015 | 169,479 | |||||||||
Long-term debt, less current portion, net | 535,881 | 395,825 | |||||||||
Lease liabilities | 67,065 | 39,828 | |||||||||
Deferred tax liability, net | 18,326 | 23,834 | |||||||||
Other liabilities | 25,443 | 23,649 | |||||||||
Total liabilities | 888,730 | 652,615 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $1 par value: | |||||||||||
Authorized - 500,000 shares, issued and outstanding — None | — | — | |||||||||
Common stock, $1 par value: | |||||||||||
Authorized - 70,000,000 shares Issued - 47,535,618 and 39,460,724 shares, respectively Outstanding - 46,758,359 and 38,833,568 shares, respectively | 46,758 | 38,834 | |||||||||
Capital in excess of par value | 671,154 | 572,379 | |||||||||
Retained deficit | (34,707) | (25,736) | |||||||||
Treasury stock – 777,259 and 627,156 shares, respectively | (16,434) | (12,526) | |||||||||
Accumulated other comprehensive income (loss) | (5,170) | (9,956) | |||||||||
Total stockholders’ equity | 661,601 | 562,995 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,550,331 | $ | 1,215,610 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue | $ | 405,239 | $ | 328,850 | $ | 1,570,402 | $ | 1,151,422 | |||||||||||||||
Cost of goods sold | 267,555 | 212,558 | 1,018,527 | 760,524 | |||||||||||||||||||
Gross profit | 137,684 | 116,292 | 551,875 | 390,898 | |||||||||||||||||||
Selling, general and administrative expenses | 137,973 | 103,634 | 508,884 | 349,112 | |||||||||||||||||||
Operating income (loss) | (289) | 12,658 | 42,991 | 41,786 | |||||||||||||||||||
Interest expense | (12,717) | (7,597) | (42,774) | (24,301) | |||||||||||||||||||
Loss on extinguishment of debt | — | — | — | (3,395) | |||||||||||||||||||
Change in fair value of earnout liabilities | 112 | (4,431) | 758 | (483) | |||||||||||||||||||
Other income (expense), net | (113) | (894) | (2,982) | (670) | |||||||||||||||||||
Income (loss) before income taxes | (13,007) | (264) | (2,007) | 12,937 | |||||||||||||||||||
Income tax expense (benefit) | 3,323 | 1,619 | 6,960 | 5,531 | |||||||||||||||||||
Net income (loss) | $ | (16,330) | $ | (1,883) | $ | (8,967) | $ | 7,406 | |||||||||||||||
Basic income (loss) per share of common stock | $ | (0.35) | $ | (0.05) | $ | (0.20) | $ | 0.22 | |||||||||||||||
Diluted income (loss) per share of common stock | $ | (0.35) | $ | (0.05) | $ | (0.20) | $ | 0.21 | |||||||||||||||
Basic weighted average shares outstanding | 46,804,556 | 38,816,834 | 44,868,862 | 34,291,870 | |||||||||||||||||||
Diluted weighted average shares outstanding | 46,804,556 | 38,816,834 | 44,868,862 | 35,086,592 |
Twelve Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Operating activities | |||||||||||
Net income (loss) | $ | (8,967) | $ | 7,406 | |||||||
Adjustments to reconcile to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 63,588 | 45,186 | |||||||||
Amortization of debt issuance costs | 2,420 | 1,888 | |||||||||
Extinguishment of debt | — | 3,395 | |||||||||
Stock-based compensation | 7,940 | 2,448 | |||||||||
Compensation expense related to employee share purchases | 427 | — | |||||||||
Deferred income taxes | (8,028) | (2,406) | |||||||||
Change in fair value of earnout liabilities | (758) | 483 | |||||||||
Gain on sale of rental equipment | (2,675) | (3,632) | |||||||||
Loss on sale of property, plant and equipment | 294 | — | |||||||||
Charge for step-up of acquired inventory | 3,582 | 2,866 | |||||||||
Net realizable value adjustment and write-offs for obsolete and excess inventory | 8,990 | 4,608 | |||||||||
Bad debt expense | 784 | 795 | |||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | 18,020 | (21,771) | |||||||||
Inventories | (1,236) | (42,404) | |||||||||
Prepaid expenses and other current assets | 931 | (1,874) | |||||||||
Accounts payable | 3,048 | (8,839) | |||||||||
Accrued expenses and other current liabilities | 13,667 | 4,492 | |||||||||
Other changes in operating assets and liabilities | 259 | (3,670) | |||||||||
Net cash provided by (used in) operating activities | 102,286 | (11,029) | |||||||||
Investing activities | |||||||||||
Purchases of property, plant and equipment | (15,337) | (8,307) | |||||||||
Business acquisitions, net of cash acquired | (259,835) | (115,343) | |||||||||
Purchases of rental equipment | (9,341) | (11,794) | |||||||||
Proceeds from sale of rental equipment | 5,990 | 8,756 | |||||||||
Net cash provided by (used in) investing activities | (278,523) | (126,688) | |||||||||
Financing activities | |||||||||||
Proceeds from revolving lines of credit | 180,982 | 383,489 | |||||||||
Payments on revolving lines of credit | (302,083) | (320,751) | |||||||||
Proceeds from term loans | 305,000 | 445,630 | |||||||||
Payments on term loans | (26,375) | (335,305) | |||||||||
Deferred financing costs | (3,419) | (11,956) | |||||||||
Proceeds from rights offering, net of offering costs of $1,531 | 98,469 | — | |||||||||
Repurchase of common stock | (3,619) | (1,940) | |||||||||
Shares repurchased held in treasury | (287) | (520) | |||||||||
Proceeds from employees for share purchases | 3,253 | — | |||||||||
Payment of financing lease principal | (515) | (429) | |||||||||
Payment of earnout | (1,000) | — | |||||||||
Payment on seller's note | — | (9,757) | |||||||||
Net cash provided by (used in) financing activities | 250,406 | 148,461 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 717 | (675) | |||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 74,886 | 10,069 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 24,740 | 14,671 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 99,626 | $ | 24,740 | |||||||
Cash and cash equivalents | $ | 83,931 | $ | 24,554 | |||||||
Restricted cash | 15,695 | 186 | |||||||||
Total cash, cash equivalents and restricted cash | $ | 99,626 | $ | 24,740 |
Distribution Solutions Group, Inc. | |||||||||||
Table 1 - Selected Segment Financial Data | |||||||||||
(Dollars in thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
December 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue: | |||||||||||
Lawson Products | $ | 109,807 | $ | 108,029 | |||||||
Gexpro Services | 93,211 | 100,103 | |||||||||
TestEquity | 190,685 | 105,374 | |||||||||
Other | 13,236 | 15,344 | |||||||||
Intersegment revenue elimination | (1,700) | — | |||||||||
Total | $ | 405,239 | $ | 328,850 | |||||||
Operating income (loss): | |||||||||||
Lawson Products | $ | 5,140 | $ | 3,746 | |||||||
Gexpro Services | 3,516 | 4,317 | |||||||||
TestEquity | (8,282) | 3,932 | |||||||||
Other | (663) | 663 | |||||||||
Total | $ | (289) | $ | 12,658 |
DISTRIBUTION SOLUTIONS GROUP, INC. | |||||
SEC REGULATION G GAAP RECONCILIATIONS |
Distribution Solutions Group, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Table 2 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Q4 2023 and Q4 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lawson Products | Gexpro Services | TestEquity | All Other | Eliminations | Consolidated DSG | ||||||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Q4 2023 | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | Q4 2022 | |||||||||||||||||||||||||||||||||||||||||
Revenue from external customers | $ | 109,475 | $ | 108,029 | $ | 91,968 | $ | 100,103 | $ | 190,560 | $ | 105,374 | $ | 13,236 | $ | 15,344 | $ | — | $ | — | $ | 405,239 | $ | 328,850 | |||||||||||||||||||||||||||||
Intersegment revenue | 332 | — | 1,243 | — | 125 | — | — | — | (1,700) | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 109,807 | $ | 108,029 | $ | 93,211 | $ | 100,103 | $ | 190,685 | $ | 105,374 | $ | 13,236 | $ | 15,344 | $ | (1,700) | $ | — | $ | 405,239 | $ | 328,850 | |||||||||||||||||||||||||||||
Operating income (loss) | $ | 5,140 | $ | 3,746 | $ | 3,516 | $ | 4,317 | $ | (8,282) | $ | 3,932 | $ | (663) | $ | 663 | $ | (289) | $ | 12,658 | |||||||||||||||||||||||||||||||||
Depreciation and amortization | 4,407 | 4,063 | 4,026 | 4,196 | 7,315 | 5,055 | 524 | 558 | 16,272 | 13,872 | |||||||||||||||||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger and acquisition related costs(1) | 360 | 1,324 | 268 | 1,823 | 931 | 1,486 | 939 | — | 2,498 | 4,633 | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation(2) | 2,499 | 2,003 | — | — | — | — | — | — | 2,499 | 2,003 | |||||||||||||||||||||||||||||||||||||||||||
Severance and acquisition related retention expenses(3) | 46 | 217 | 199 | 221 | 11,153 | 3 | 2 | 2 | 11,400 | 443 | |||||||||||||||||||||||||||||||||||||||||||
Inventory step-up(4) | — | — | — | — | 716 | — | — | — | 716 | — | |||||||||||||||||||||||||||||||||||||||||||
Other non-recurring(5) | (30) | 156 | 814 | 238 | — | — | — | — | 784 | 394 | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP adjusted EBITDA | $ | 12,422 | $ | 11,509 | $ | 8,823 | $ | 10,795 | $ | 11,833 | $ | 10,476 | $ | 802 | $ | 1,223 | $ | 33,880 | $ | 34,003 | |||||||||||||||||||||||||||||||||
Operating income (loss) as a percent of revenue | 4.7% | 3.5% | 3.8% | 4.3% | (4.3)% | 3.7% | (5.0)% | 4.3% | (0.1)% | 3.8% | |||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA as a percent of revenue | 11.3% | 10.7% | 9.5% | 10.8% | 6.2% | 9.9% | 6.1% | 8.0% | 8.4% | 10.3% | |||||||||||||||||||||||||||||||||||||||||||
Distribution Solutions Group, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Table 3 - Reconciliation of GAAP Revenue to Pro Forma Revenue and GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA | |||||||||||||||||||||||||||||||||||||||||||||||||||||
YTD 2023 and YTD 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lawson Products | Gexpro Services | TestEquity | Other | Eliminations | Consolidated DSG | ||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||
Revenue from external customers | $ | 468,379 | $ | 324,783 | $ | 404,490 | $ | 385,326 | $ | 641,643 | $ | 392,358 | $ | 55,890 | $ | 48,955 | $ | — | $ | — | $ | 1,570,402 | $ | 1,151,422 | |||||||||||||||||||||||||||||
Intersegment revenue | 332 | — | 1,243 | — | 125 | — | — | — | (1,700) | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Revenue | 468,711 | 324,783 | 405,733 | 385,326 | 641,768 | 392,358 | 55,890 | 48,955 | (1,700) | — | 1,570,402 | 1,151,422 | |||||||||||||||||||||||||||||||||||||||||
Pre-merger revenue(1) | — | 104,902 | — | — | — | — | — | 12,975 | — | — | — | 117,877 | |||||||||||||||||||||||||||||||||||||||||
Pro forma revenue | $ | 468,711 | $ | 429,685 | $ | 405,733 | $ | 385,326 | $ | 641,768 | $ | 392,358 | $ | 55,890 | $ | 61,930 | $ | (1,700) | $ | — | $ | 1,570,402 | $ | 1,269,299 | |||||||||||||||||||||||||||||
Operating income (loss) | $ | 32,498 | $ | 6,536 | $ | 27,000 | $ | 21,291 | $ | (16,465) | $ | 11,375 | $ | (42) | $ | 2,584 | $ | 42,991 | $ | 41,786 | |||||||||||||||||||||||||||||||||
Pre-merger operating income(1) | — | 11,096 | — | — | — | — | — | 980 | — | 12,076 | |||||||||||||||||||||||||||||||||||||||||||
Pro forma merger adjustments(2) | — | (4,086) | — | — | — | — | — | — | — | (4,086) | |||||||||||||||||||||||||||||||||||||||||||
Pro forma operating income (loss) | 32,498 | 13,546 | 27,000 | 21,291 | (16,465) | 11,375 | (42) | 3,564 | 42,991 | 49,776 | |||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 19,532 | 14,716 | 15,986 | 15,175 | 26,002 | 17,480 | 2,068 | 2,080 | 63,588 | 49,451 | |||||||||||||||||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger and acquisition related costs(3) | 3,015 | 7,672 | 1,081 | 5,957 | 6,215 | 4,786 | 1,250 | — | 11,561 | 18,415 | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation(4) | 7,940 | (4,237) | — | — | — | — | — | — | 7,940 | (4,237) | |||||||||||||||||||||||||||||||||||||||||||
Severance and acquisition related retention expenses(5) | 476 | 2,050 | 238 | 266 | 23,949 | 1,095 | 3 | 11 | 24,666 | 3,422 | |||||||||||||||||||||||||||||||||||||||||||
Inventory net realizable value adjustment(6) | — | 1,737 | — | — | — | — | — | — | — | 1,737 | |||||||||||||||||||||||||||||||||||||||||||
Inventory step-up(7) | — | 1,943 | — | 163 | 3,582 | — | — | 761 | 3,582 | 2,867 | |||||||||||||||||||||||||||||||||||||||||||
Other non-recurring(8) | 202 | 1,199 | 886 | 354 | — | — | 1,620 | 44 | 2,708 | 1,597 | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP adjusted EBITDA | $ | 63,663 | $ | 38,626 | $ | 45,191 | $ | 43,206 | $ | 43,283 | $ | 34,736 | $ | 4,899 | $ | 6,460 | $ | 157,036 | $ | 123,028 | |||||||||||||||||||||||||||||||||
Operating income (loss) as a percent of revenue | 6.9% | 2.0% | 6.7% | 5.5% | (2.6)% | 2.9% | (0.1)% | 5.3% | 2.7% | 3.6% | |||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA as a percent of revenue | 13.6% | 11.9% | 11.1% | 11.2% | 6.7% | 8.9% | 8.8% | 13.2% | 10.0% | 10.7% | |||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA as a percent of pro forma revenue | 13.6% | 9.0% | 11.1% | 11.2% | 6.7% | 8.9% | 8.8% | 10.4% | 10.0% | 9.7% |
Distribution Solutions Group, Inc. | |||||||||||||||||||||||
Table 4 - 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 | |||||||||||||||||||||||
December 31, 2023 | December 31, 2022(3)(4) | ||||||||||||||||||||||
Amount | Diluted EPS(2) | Amount | Diluted EPS(2) | ||||||||||||||||||||
Net income (loss) | $ | (16,330) | $ | (0.35) | $ | (1,883) | $ | (0.05) | |||||||||||||||
Pretax adjustments: | |||||||||||||||||||||||
Stock-based compensation | 2,499 | 0.05 | 2,003 | 0.05 | |||||||||||||||||||
Merger and acquisition related costs | 2,498 | 0.05 | 4,633 | 0.12 | |||||||||||||||||||
Amortization of intangible assets | 10,398 | 0.22 | 8,186 | 0.21 | |||||||||||||||||||
Severance and acquisition related retention expenses | 11,400 | 0.24 | 443 | 0.01 | |||||||||||||||||||
Change in fair value of earnout liabilities | (112) | — | 4,431 | 0.11 | |||||||||||||||||||
Inventory step-up | 716 | 0.02 | — | — | |||||||||||||||||||
Other non-recurring | 784 | 0.02 | 394 | 0.01 | |||||||||||||||||||
Total pretax adjustments | 28,183 | 0.60 | 20,090 | 0.51 | |||||||||||||||||||
Tax effect on adjustments(1) | (7,412) | (0.16) | (5,264) | (0.14) | |||||||||||||||||||
Deferred tax asset valuation allowance(5) | 6,144 | 0.13 | 124 | — | |||||||||||||||||||
Non-GAAP adjusted net income | $ | 10,585 | $ | 0.22 | $ | 13,067 | $ | 0.32 |
Distribution Solutions Group, Inc. | |||||||||||||||||||||||
Table 5 - 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) | |||||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||
December 31, 2023 | December 31, 2022(3)(4) | ||||||||||||||||||||||
Amount | Diluted EPS(2) | Amount | Diluted EPS(2) | ||||||||||||||||||||
Net income (loss) | $ | (8,967) | $ | (0.20) | $ | 7,406 | $ | 0.21 | |||||||||||||||
Pretax adjustments: | |||||||||||||||||||||||
Stock-based compensation | 7,940 | 0.18 | 2,448 | 0.07 | |||||||||||||||||||
Merger and acquisition related costs | 11,561 | 0.26 | 15,441 | 0.44 | |||||||||||||||||||
Amortization of intangible assets | 40,263 | 0.90 | 29,097 | 0.83 | |||||||||||||||||||
Severance and acquisition related retention expenses | 24,666 | 0.55 | 2,796 | 0.08 | |||||||||||||||||||
Change in fair value of earnout liabilities | (758) | (0.02) | 483 | 0.01 | |||||||||||||||||||
Loss on extinguishment of debt | — | — | 3,395 | 0.10 | |||||||||||||||||||
Inventory net realizable value adjustment | — | — | 1,737 | 0.05 | |||||||||||||||||||
Inventory step-up | 3,582 | 0.08 | 2,867 | 0.08 | |||||||||||||||||||
Other non-recurring | 2,708 | 0.06 | 1,597 | 0.05 | |||||||||||||||||||
Total pretax adjustments | 89,962 | 2.01 | 59,861 | 1.71 | |||||||||||||||||||
Tax effect on adjustments(1) | (23,660) | (0.53) | (15,684) | (0.45) | |||||||||||||||||||
Deferred tax asset valuation allowance | 6,144 | 0.14 | 124 | — | |||||||||||||||||||
Non-GAAP adjusted net income | $ | 63,479 | $ | 1.42 | $ | 51,707 | $ | 1.47 |
Distribution Solutions Group, Inc. | |||||||||||||||||||||||
Table 6 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Operating income (loss) | $ | (289) | $ | 12,658 | $ | 42,991 | $ | 41,786 | |||||||||||||||
Pre-merger operating income(1) | — | — | — | 12,076 | |||||||||||||||||||
Pro forma merger adjustments(2) | — | — | — | (4,086) | |||||||||||||||||||
Pro forma operating income (loss) | (289) | 12,658 | 42,991 | 49,776 | |||||||||||||||||||
Gross profit adjustments: | |||||||||||||||||||||||
Inventory step-up(3) | 716 | — | 3,582 | 2,867 | |||||||||||||||||||
Inventory net realizable value adjustment(4) | — | — | — | 1,737 | |||||||||||||||||||
Total gross profit adjustments | 716 | — | 3,582 | 4,604 | |||||||||||||||||||
Selling, general and administrative expenses adjustments: | |||||||||||||||||||||||
Merger and acquisition related costs(5) | 2,498 | 4,633 | 11,561 | 18,415 | |||||||||||||||||||
Stock-based compensation(6) | 2,499 | 2,003 | 7,940 | (4,237) | |||||||||||||||||||
Severance and acquisition related retention expenses(7) | 11,400 | 443 | 24,666 | 3,422 | |||||||||||||||||||
Other non-recurring(8) | 784 | 394 | 2,708 | 1,597 | |||||||||||||||||||
Total selling, general and administrative adjustments | 17,181 | 7,473 | 46,875 | 19,197 | |||||||||||||||||||
Total adjustments | 17,897 | 7,473 | 50,457 | 23,801 | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 17,608 | $ | 20,131 | $ | 93,448 | $ | 73,577 | |||||||||||||||
Cover |
Mar. 07, 2024 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Mar. 07, 2024 |
Entity Registrant Name | DISTRIBUTION SOLUTIONS GROUP, INC. |
Amendment Flag | false |
Entity Central Index Key | 0000703604 |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 0-10546 |
Entity Tax Identification Number | 36-2229304 |
Entity Address, Address Line One | 301 Commerce Street, Suite 1700, |
Entity Address, City or Town | Fort Worth, |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 76102 |
City Area Code | (888) |
Local Phone Number | 611-9888 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common stock, $1.00 par value |
Trading Symbol | DSGR |
Entity Emerging Growth Company | false |
Security Exchange Name | NASDAQ |
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