Distribution : Q1 2026 Financial Results 4302026

Published: 2026-04-30 07:49:22 ET DSGR

Published on 04/30/2026 at 07:49 am EDT

NASDAQ: DSGR

Q1 2026 Financial Results

April 30, 2026

Key Takeaways for the Quarter

Total sales growth of $18.0 million or 3.8% with organic sales up 3.6%, $0.8 million partial quarter additional revenue from the acquisition closed in 2026 not in for 2025; sequentially, organic sales up 2.8% with organic average daily sales growing 3.7% over the fourth quarter of 2025

Adjusted EBITDA of $37.8M or 7.6% of sales compared to $42.8M or 9.0% of sales in the prior year quarter and $35.4 million or 7.4% of sales in the fourth quarter of 2025. Margin pressures on sales mix shift, initiative investments and increased employee related costs

New VMI installs and wallet share expansion continue to drive Lawson's organic growth; leveraging technology through increased rigor of sales rep activity

Leadership team at TestEquity clarifying customer value proposition, go-to-market strategy and tactical reallocation of resources through centralization of certain functions to strengthen operations.

Canadian Branch Division well underway on realizing gross margin and branch consolidation. External headwinds softening in Eastern Canada, pipeline improving

Macro environment improving, momentum continues in key end markets, including aerospace & defense, technology and industrial power. Renewables slowing in North America, while global markets are expanding for technology, industrial power, aerospace & defense and power generation

Test & measurement, chambers and rentals gaining momentum; electronic production supply and industrial printing remain under pressure

Tariff uncertainties persist

Used $20.4M of cash flow from operations in Q1. Inventory build to support sequential sales trend.

Total liquidity of $415.2M. Balance sheet continues to strengthen; net working capital ended at $512.3 million

Pipeline for acquisition opportunities remains active and building; completed acquisition of Eastern Valve & Control Specialties Ltd. in Q1

Results are presented on an Adjusted (Non-GAAP) and continuing operations basis. See appendix of this presentation and press release for GAAP to Non-GAAP reconciliations.

3

Leading Specialty Industrial Distribution Platform

MRO Focus

VMI Focus

Canadian Branch Focus

OEM Focus

Industrial Technologies Focus

Leading vendor managed inventory provider of C-parts to the MRO market

Leading wholesale distributor of MRO supplies, safety products, fasteners, and services to the Canadian MRO market

Leading global supply chain services and C-parts provider to OEM and aftermarket applications

Leading supplier of electronic and specialty production supplies and T&M equipment across OEM and MRO markets

~23% of Revenue (2) ~12% of Revenue (2) ~25% of Revenue (2) ~40% of Revenue (2)

TTM

Fi ial

nanc

$2.01Bn

Adjusted Revenue

~8.6%

Adjusted EBITDA %

~$126M

Adj. Free Cash Flow (1)

Fly-by

O g

peratin

Highlights

Stats

50+

Countries Served

220k+

Customers

760k+

Unique SKU's

4

Results are presented on an Adjusted (Non-GAAP) and continuing operations basis. See appendix of this presentation and press release for GAAP to Non-GAAP reconciliations. Information inclusive of Other Acquisition results prior to the acquisition date.

Defined as Reg G EBITDA less Reg G cash items, less capex, plus/minus change in inventory, accounts receivable & accounts payable divided by Reg G EBITDA.

TTM revenue by segment inclusive of Other Acquisition results prior to the acquisition date.

Q1 revenue of $496.0M; up $18.0M or 3.8% over a year ago primarily driven by organic sales growth of 3.6% and $0.8 million of partial quarter incremental revenue from the acquisition closed in the first quarter of 2026. Sequentially, organic sales grew 2.8% with organic average daily sales growing 3.7% over the fourth quarter of 2025.

Q1 Adjusted EBITDA of $37.8M or 7.6% of sales compared to $42.8M or 9.0% of sales in the prior year quarter and $35.4M or 7.4% sequentially. Adjusted EBITDA was pressured primarily due to product and customer mix shifts, initiative investments and higher employee related costs. The Company estimates that certain timing and isolated expenses, as well as fewer selling days in the quarter, negatively impacted adjusted EBITDA as a percent of revenues by approximately 70bps for the quarter. Excluding these items, adjusted EBITDA would have been 8.3% for the quarter.

Diluted net earnings per share was $0.01 for the quarter compared to diluted net earnings per share of $0.07 in the year-ago quarter. Non-GAAP adjusted diluted earnings per share was $0.24 compared to $0.31 for the same period a year ago and $0.18 in the fourth quarter 2025.

$525

$500

$475

$450

$425

478.0

518.0

502.4

481.6

496.0

$50

$45

$40

$35

$30

$25

48.6 48.5

42.8

35.4

37.8

$400

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

$20

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

Adj EBITDA Margin 9.0% 9.7% 9.4% 7.4% 7.6%

Organic average daily sales (ADS) growth of 2.7% across majority of customer segments over prior year quarter; up sequentially 4.4%

Q1 adjusted EBITDA of $11.6M or 9.3% of revenue; sales mix shift, continued investment in sales transformation and higher employee-related costs pressured margins over prior year quarter. Adjusted EBITDA margin up sequentially from 6.7%

Continued investment in tools, products and support resources to provide productivity opportunities for our sales force. Leveraging technology while driving daily operating rigor and expanding ecommerce channel while investing in sales leadership

$120.5 $114.8 $123.7

Q1 2025 Q4 2025 Q1 2026

$14.3

$11.6

$7.7

Q1 2025 Q4 2025 Q1 2026

Adj EBITDA Margin 11.9% 6.7% 9.3%

Although improving, continued market softness for projects and manufacturing end market amid tariff-related uncertainties, in particular in Eastern Canada

$50.5

$55.1

$51.0

Organic average daily sales (ADS) down 0.6% over prior year quarter (down ~5.7% on a constant currency basis); Eastern Valve contributed $0.8 million in sales for the partial quarter

Q1 adjusted EBITDA of $2.8M or 5.5% of revenue, +30bps YoY driven driven by improvement in gross margin and lower operating expenses

Driving key operating initiatives focused on acquisition integration, including the consolidation of 4 facilities in 2025 and improvement of gross margins underway

Q1 2025 Q4 2025 Q1 2026

$2.6

$2.8

$3.6

Q1 2025 Q4 2025 Q1 2026

Adj EBITDA Margin 5.2% 6.6% 5.5%

Organic average daily sales (ADS) growth of 0.6% over prior year quarter; up sequentially 6.7% on improvements in the technology, renewables, aerospace & defense and consumer & industrial vertical markets

Q1 adjusted EBITDA of $12.0M or 10.2% of revenue; margin percentage compressed YoY on lower gross profit margin from tariff pass through and higher employee related costs.

Value creation initiatives including DSG cross sell, acquisition synergies and expanded VMI, kitting, manufacturing and Ecommerce offerings. Customers very interested in Gexpro Services Frontier, Omni/Orion and SIS domestic manufacturing capabilities to mitigate tariff impacts

$118.9 $119.4 $117.6

Q1 2025 Q4 2025 Q1 2026

$12.0

$15.0 $13.9

Q1 2025

Q4 2025

Q1 2026

Adj EBITDA Margin

12.6%

11.7%

10.2%

Organic average daily sales (ADS) growth of 9.9% from year-ago quarter on higher test and measurement, rental revenue and electronic production supplies; up 5.8% sequentially.

Q1 adjusted EBITDA of $13.2M or 6.5% of revenue, pressured from year-ago quarter on higher employee-related expenses including building out the leadership team. Adjusted EBITDA margin up sequentially from 6.4%

Key operating initiatives focused on expansion of service related offerings, continued acquisition integration, pricing disciplines, sales force optimization, digital channel expansion and cost containment

Leadership team focused on go to market strategy and daily execution and fundamental improvements

$188.8 $192.9 $204.2

Q1 2025 Q4 2025 Q1 2026

$12.8 $12.3 $13.2

Q1 2025

Q4 2025

Q1 2026

Adj EBITDA Margin

6.8%

6.4%

6.5%

Robust Net Working Capital Investment

Adding scale, footprint, product adjacencies & services

Building structurally high margin value added industrial distribution businesses

Disciplined acquisition criteria

M&A

Market share growth

Value-accretive initiatives

Wallet-share expansion

Cross-selling opportunities

Organic Growth

$512.3M

Authorized $67.5M share repurchase program in place

Repurchased shares of $34.6M in prior years; $32.9M still available under prior authorizations

Return Capital to Shareholders

3.6x

Leverage(1) at April 1, 2022 Merger Close

⇩

3.8x

Leverage(1) as of March 31, 2026

Cash used in operations of ~$20M in Q1

Inclusive of 10 acquisitions post-April 2022 merger with cash portion of

purchase price of ~$466M

Focus on Deleveraging via Earnings Growth and Free Cash Flow

Generation

$(167.9)M

$373.5M

$306.7M

Accounts Receivable

Inventory

Accounts Payable

3/31/2026 Trade NWC

High returns realized on working capital investments

Total Liquidity at March 31, 2026 ~$415M(2)

TTM Free Cash Flow Conversion of ~74%(3)

TTM ROIC of ~9%(4)

As defined under DSG's credit agreement.

Inclusive of restricted & unrestricted cash position and availability under credit facility.

Defined as Reg G EBITDA less Reg G cash items, less capex, plus/minus change in inventory, accounts receivable & accounts payable divided by Reg G EBITDA.

Defined as adjusted net operating profit after tax (NOPAT) divided by invested capital (current assets plus property, plant and equipment (net), rental equipment (net), goodwill, intangible assets (net), and other assets less cash and cash equivalents, accounts payable, accrued expenses and other current liabilities and goodwill related to the April 2022 DSG merger).

Results Inclusive of Pre-Acquisition Results

Adjusted Revenue and adjusted EBITDA below include the reported GAAP results and the pre-acquisition results of other businesses that were acquired at any time during the Q1 2025-Q1 2026 period.

$525

521.0

$50

49.2 49.0

$500

$475

$450

480.4

505.3

485.8

498.4

$45

$40

$35

$30

43.1

36.2

38.4

$425

$25

$400

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

$20

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

Adj EBITDA Margin 9.0% 9.7 % 9.4 % 7.5 % 7.7 %

12

Adjusted Revenue and Adjusted EBITDA results are presented on an Adjusted (Non-GAAP) and continuing operations basis. Information inclusive of Other Acquisition results prior to the acquisition date.

Q1 Revenue and Adjusted EBITDA Reconciliation ($000s)

(Unaudited)

Lawson Products Gexpro Services TestEquity

Canada Branch

Division All Other Eliminations Consolidated DSG

Quarter Ended

Q1 2026

Q1 2025

Q1 2026

Q1 2025

Q1 2026

Q1 2025

Q1 2026

Q1 2025

Q1 2026

Q1 2025

Q1 2026 Q1 2025

Q1 2026

Q1 2025

Revenue from external customers

$ 123,689

$ 120,440

$ 117,543

$ 118,593

$ 203,764

$ 188,456

$ 50,999

$ 50,540

$ - $ -

$ - $ - $ 495,995 $ 478,029

Intersegment revenue

47

22

105

312

412

317

23

3

- -

(587) (654) - -

Revenue

$ 123,736

$ 120,462

$ 117,648

$ 118,905

$ 204,176

$ 188,773

$ 51,022

$ 50,543

$ - $ -

$ (587) $ (654) $ 495,995 $ 478,029

Operating income (loss)

$

3,056

$

6,316

$

8,401

$

11,241

$

4,047

$

4,130

$

386

$

651

$

(2,260) $

(2,241)

$

13,630

$

20,097

Depreciation and amortization

6,714

6,552

3,129

3,453

8,280

8,128

1,601

1,846

-

-

19,724

19,979

Acquisition related costs(1) 24 102 36 265 50 (293) 643 - - 34 753 108

Adjustments:

Severance and acquisition related retention expenses(3)

745

814

96

16

181

678

119

119

-

1

1,141

1,628

Stock-based compensation(2) 938 523 365 - 688 168 - - 433 283 2,424 974

Inventory step-up(4) - - - - - - 24 - - - 24 -

Other non-recurring(5) 92 - - - - - 45 - - - 137 -

Non-GAAP adjusted EBITDA $ 11,569 $ 14,307 $ 12,027 $ 14,975 $ 13,246 $ 12,811 $ 2,818 $ 2,616 $ (1,827) $ (1,923) $ 37,833 $ 42,786

Operating income (loss) as a

percent of revenue 2.5% 5.2% 7.1% 9.5% 2.0% 2.2% 0.8% 1.3% N/M N/M 2.7% 4.2%

Adjusted EBITDA as a percent of revenue

9.3%

11.9%

10.2%

12.6%

6.5%

6.8%

5.5%

5.2%

N/M

N/M

7.6%

9.0%

Transaction and integration costs related to acquisitions.

Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price.

Includes severance expense for actions taken not related to a formal restructuring plan and acquisition related retention expenses.

Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed.

Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items.

N/M - Not meaningful

Results are presented on an Adjusted (Non-GAAP) and continuing operations basis.

13

Adjusted Revenue and Adjusted EBITDA Reconciliation ($000s)

Results Inclusive of Acquisitions - Pre-Acquisition Date

(Unaudited)

Consolidated DSG

Quarter Ended Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

Revenue

$ 478,029

$ 502,437

$ 517,958

$ 481,599

$ 495,995

Pre-acquisition revenue(1)

2,346

2,837

3,068

4,212

2,449

Adjusted revenue

$ 480,375

$ 505,274

$ 521,026

$ 485,811

$ 498,444

Operating income (loss)

$ 20,097

$ 26,826

$ 23,619

$ 7,721

$ 13,630

Pre-acquisition operating Income (loss) (1)

309

565

565

771

556

Adjusted Operating Income (loss)

20,406

27,391

24,184

8,492

14,186

Depreciation and amortization

19,979

20,338

20,042

20,520

19,724

Adjustments:

Acquisition related costs(2)

108

(208)

87

178

753

Stock-based compensation(3)

974

1,250

2,400

2,048

2,424

Severance and acquisition related retention expenses(4)

1,628

355

2,094

1,403

1,141

Inventory step-up(5)

-

-

-

-

24

Other non-recurring(6)

-

-

215

3,567

137

Pre-Acquisition add-backs(7)

32

29

27

29

23

Adjusted EBITDA

$ 43,127

$ 49,155

$ 49,049

$ 36,237

$ 38,412

Operating income (loss) as a percent of revenue

4.2%

5.3%

4.6%

1.6%

2.7%

Adjusted EBITDA as a percent of adjusted revenue

9.0%

9.7%

9.4%

7.5%

7.7%

References to table footnotes are on slide 15

Results are presented on an Adjusted (Non-GAAP) and continuing operations basis. 14

‌Adjusted Revenue and EBITDA Reconciliation - Table Footnotes

Represents additional revenue and operating income of acquisitions prior to their acquisition dates not in reported GAAP results.

Transaction and integration costs related to acquisitions.

Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price.

Includes severance expense for actions taken not related to a formal restructuring plan and acquisition related retention expenses.

Inventory fair value step-up adjustments resulting from the acquisition accounting related to acquisitions completed.

Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items.

Represents additional EBITDA adjustments of other acquisitions prior to the respective acquisition dates.

GAAP Net Income (Loss) and GAAP Diluted EPS to Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted EPS Reconciliation ($000s, except per share data)

(Unaudited)

Consolidated DSG

Q1 2026 Q1 2025 Q4 2025

Diluted

Diluted

Diluted

Amount

EPS(2) Amount

EPS(2) Amount EPS(2)

Net income (loss)

$ 382

$ 0.01

$ 3,261

$ 0.07

$ (6,371)

$ (0.14)

Pretax adjustments:

Stock-based compensation

2,424

0.05

974

0.02

2,048

0.04

Acquisition related costs

753

0.02

108

-

178

-

Amortization of intangible assets

11,004

0.23

11,585

0.24

11,600

0.25

Severance and acquisition related retention expenses

1,141

0.02

1,628

0.03

1,403

0.03

Change in fair value of earnout liabilities

-

-

1,000

0.02

-

-

Inventory step-up

24

-

-

-

-

-

Other non-recurring

137

-

-

-

3,567

0.08

Total pretax adjustments

15,483

0.32

15,295

0.31

18,796

0.40

Tax effect on adjustments(1)/(3)

(4,423)

(0.09)

(4,044)

(0.07)

(5,020)

(0.10)

Deferred tax asset valuation allowance(3)/(4)

47

-

190

-

1,085

0.02

Non-GAAP adjusted net income $ 11,489 $ 0.24 $ 14,702 $ 0.31 $ 8,490 $ 0.18

The adjustment to the income tax expense (benefit) is determined by excluding the non-GAAP adjustments by jurisdiction.

Pretax adjustments to diluted EPS calculated on 47.030 million, 47.400 million and 46.199 million diluted shares for the first quarter of 2026 and 2025, and the fourth quarter of 2025, respectively.

The quarter-to-date amounts are derived from the current period year-to-date amount less the previous quarter year-to-date amount.

The estimated impact to the deferred tax asset valuation allowance from interest expense limitations under Section 163(j) determined by including the non-GAAP adjustments by jurisdiction.

Results are presented on an Adjusted (Non-GAAP) and continuing operations basis.

Disclaimer

Distribution Solutions Group Inc. published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2026 at 11:47 UTC.