Distribution Solutions Group reports 9.8% full-year revenue growth
Reporting full-year and fourth quarter results, Distribution Solutions Group Inc. said 2025 revenue was $1.98 billion, an increase of $175.9 million or 9.8% (on one less selling day), of which $121.5 million resulted from five acquisitions only partially included in 2024.
Its Q4 revenue increased $1.1 million to $481.6 million, driven by $1.7 million of incremental revenue from two acquisitions closed in the fourth quarter of 2024, not included in the full fourth quarter of 2024.
CEO and Chairman Bryan King said, "For the full year, we delivered sales growth of 9.8% despite one less selling day, supported by organic average daily sales growth of 3.6%. This performance reflects the strength of our operating model and execution amidst a challenging macroeconomic environment affecting most U.S. companies in 2025. We generated improved GAAP net income and strong operating cash flow for the year, demonstrating the resilience of our business while continuing to invest in growth initiatives. While margins were pressured by end-market softness, sales mix, timing of certain expenses and continued investments, we believe actions being taken within our verticals are positioning us better for long-term profitable growth.
"Cash flow generation continues to be very strong. We generated full year operating cash flow of $84 million on top of $56 million in the year-ago period. This allowed us to return more than $23 million to shareholders through stock repurchases in 2025, reflecting our confidence in the Company's strategic advancement. Margin pressure during the period was primarily driven by shifts in the product and solutions mix, including acquisition-related impacts, and timing of employee-related costs, particularly in healthcare benefits, and leadership talent investments. While the fourth quarter margin did not play out as anticipated given some of these dynamics, it is not indicative of our longer-term plans or our confidence in the future. Industry-wide softness and continued investments in the business have pressured margins in the short-term, however, we are encouraged by the disciplined execution of our strategy and the progress on our key operating initiatives.
"Total available liquidity was $469 million at year end, with a minimal outstanding revolver balance," he continued. "During the fourth quarter, we extended our senior secured credit facility through 2030, providing $700 million of term debt and increasing our revolving credit capacity from $255 million to $400 million. This further strengthens our liquidity profile and enhances our financial flexibility to pursue acquisitions and other strategic growth initiatives. As we look ahead to 2026, we are beginning to see backlogs build and improved momentum in our weekly sales cadence. We remain focused on building structurally higher-margin businesses that generate strong free cash flow, creating long-term shareholder value."
For the full year, operating income increased $22.3 million from the prior year to $78.3 million, net of acquired intangible amortization of $46.5 million and $16.1 million of non-recurring severance and acquisition-related retention costs, stock-based compensation, acquisition-related costs and other non-recurring items. Adjusted operating income, excluding these non-cash and non-recurring items, decreased $7.5 million to $140.8 million compared to $148.4 million in 2024.
Net income increased by $15.7 million to $8.3 million in 2025 compared to a net loss of $7.3 million in the prior year.
For the fourth quarter, operating income was $7.7 million, net of $11.6 million of non-cash acquired intangible amortization and $7.2 million of non-recurring severance and acquisition-related retention costs, stock-based compensation, acquisition-related costs and other non-recurring items. This compares to an operating income of $20.1 million in the prior year quarter. Adjusted operating income, excluding these non-cash and non-recurring items, was $26.5 million in the current quarter compared to $37.3 million in the year-ago quarter.
Net loss was $6.4 million for the quarter compared to net loss of $25.9 million in the prior year quarter which was negatively impacted by higher tax expense.
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