DSG increases revenue 6.6% in third quarter
Distribution Solutions Group's third quarter revenue increased $29.1 million, or 6.6%, to $468.0 million including $38.1 million of incremental revenue from three acquisitions closed in 2024.
While organic sales declined 2.1% over a year ago, organic sales grew 0.2% sequentially over the second quarter of 2024.
The company completed the acquisition of Source Atlantic in August 2024, signed agreements to purchase ConRes Test Equipment with expectations to cloe in Q4, and in October closed on the purchase of Tech-Component Resources Pte Ltd (TCR).
"We are pleased with DSG’s third quarter results, which delivered sales and profitability growth over the prior-year quarter," said CEO and Chairman of the Board Bryan King. "Total sales, including acquisitions, grew 6.6% to $468 million despite organic revenue compression of 2.1% compared to the year-ago quarter. Adjusted EBITDA for the quarter grew by 12.4% to $49.1 million, or 10.5% as a percentage of sales. Acquisitions in 2024 drove the quarterly sales increase, and we reported average daily sales for Lawson up 1.4%, for Gexpro Services up 12.5%, and for TestEquity down 7.4% for the period. Sequentially, compared to the second quarter, total sales grew by 6.5%, organic sales were up slightly at 0.2%, and the Adjusted EBITDA margin of 10.5% expanded by 20 basis points.
"DSG’s Source Atlantic acquisition, under our Lawson Products operating company, closed this quarter, and combined with Lawson’s The Bolt Supply House, we added a reportable segment focused on the Canadian MRO market," he continued. "This CAD $250 million revenue Canadian business will drive DSG's growth by expanding our scale, customer base, and geographic reach while enhancing our enterprise-wide product offerings. We also announced the acquisition of ConRes Test Equipment under the TestEquity operating company from Continental Resources as a carve-out. This leading test and measurement equipment provider with $12 million in annual revenues further strengthens our customer intimacy with their leasing and calibration service offerings. Finally, as part of Gexpro Services’ growth platform, we announced the strategic acquisition of Tech-Component Resources (TCR), a distributor of fasteners, mechanical components, and other industrial products in Southeast Asia to support existing large OEM customers’ expansion plans while providing us with a strategic foothold in this growing region.
"We remain focused on deploying our capital for the highest returns in acquisitions and organic investments. Our asset-light business model drives strong cash flow conversion, and our focus on capital returns positions us well to maximize long-term value for our shareholders," he concluded.
INDUSTRIAL SUPPLY MAGAZINE
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