DSG revenue increases 10.7%
Distribution Solutions Group Inc., a specialty distribution company, announced revenue increased 10.7%, to $573.6 million for its third fiscal quarter — primarily driven by organic sales growth of 9.2% and $7.8 million of incremental revenue from acquisitions closed during the first nine months of 2026.
The third quarter acquisition of American Fasteners contributed approximately $3.8 million of revenue in the third quarter. Sequentially, revenue increased 2.8% over the second quarter, driven by organic sales growth of 2.2%.
Profitability improved year-over-year on higher sales. Adjusted EBITDA margin as a percentage of sales was 9.9%, an improvement of 50 bps year-over-year. Operating income increased from $23.6 million to $25.2 million.
Gross margin decreased from 32.9% to 32.0% primarily due to customer sales mix shifts and higher tariff rates on inbound shipments, partially offset by pricing benefits realized.
Operating income was $25.2 million, net of $11.3 million of non-cash acquired intangible amortization and $11.4 million of non-recurring severance and acquisition-related retention costs, stock-based compensation, acquisition-related costs and other non-recurring items. This compares to operating income of $23.6 million in the prior year quarter which was net of $11.7 million of intangible amortization and $4.8 million of non-recurring items. Adjusted operating income, excluding these non-cash and non-recurring items, was $47.9 million in the current quarter compared to $40.1 million in the year-ago quarter and $45.2 million in the second quarter of 2026.
Net income was $8.9 million for the quarter compared to net income of $6.5 million in the year-ago quarter.
The company ended the quarter with total liquidity of $378.0 million, consisting of $72.3 million of cash (restricted and unrestricted) and $305.7 million available under its credit facility with net debt leverage of 3.4x.
INDUSTRIAL SUPPLY MAGAZINE
The September/October issue of Industrial Supply magazine features an in-depth cover story about Rotator Products. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
