Distribution Solutions Group Announces 2026 First Quarter Results
DSGR
Company Achieved 3.8% First Quarter Revenue Growth
Published on 04/30/2026 at 07:31 am EDT
Distribution Solutions Group, Inc. (NASDAQ:DSGR) ("DSG" or the "Company"), a premier specialty distribution company, today announced consolidated results for the first quarter ended March 31, 2026. This press release is supplemented by an earnings presentation at https://investor.distributionsolutionsgroup.com/news/events.
The following represents a summary of certain operating results (unaudited). See the reconciliations of GAAP to non-GAAP measures in Tables 2, 3 and 4.
Three Months Ended
March 31,
December 31,
(Dollars in thousands)
2026
2025
% Change
2025
% Change
Revenue
$
495,995
$
478,029
3.8
%
$
481,599
3.0
%
Operating income
$
13,630
$
20,097
(32.2
)%
$
7,721
76.5
%
Non-GAAP adjusted operating income
$
29,113
$
34,392
(15.3
)%
$
26,517
9.8
%
Net income (loss)
$
382
$
3,260
(88.3
)%
$
(6,371
)
106.0
%
Non-GAAP adjusted EBITDA
$
37,833
$
42,786
(11.6
)%
$
35,437
6.8
%
Operating income (loss) as a percent of revenue
2.7
%
4.2
%
-150bps
1.6
%
110bps
Adjusted EBITDA as a percent of revenue
7.6
%
9.0
%
-140bps
7.4
%
20bps
Distribution Solutions Group delivered improved revenue and sequential profitability growth in the first quarter. Revenue increased 3.8% year-over-year to $496.0 million, driven by organic sales growth of 3.6% with daily sales improvement across all of the verticals. The first quarter acquisition of Eastern Valve contributed $0.8 million for the partial quarter.
As signaled earlier, the first quarter was going to be under some margin pressures. Profitability improved sequentially on higher sales with positive momentum exiting the fourth quarter. Adjusted EBITDA margin as a percentage of sales was 7.6%, a sequential improvement of 20bps, while a sequential improvement in operating income to $13.6 million drove adjusted earnings per share by 6 cents to $0.24. 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.
Total available liquidity was $415 million at quarter end. During the quarter, DSG closed on the acquisition of Eastern Valve & Control Specialties Ltd., a provider of industrial valve products and related services supporting customers across Atlantic Canada. Eastern Valve was acquired to scale and expand DSG’s operating footprint in the Canadian market.
2026 First Quarter Summary(1)
(1) See reconciliation of GAAP to non-GAAP measures in tables 2, 3 and 4.
About Distribution Solutions Group, Inc.
Distribution Solutions Group ("DSG") is a premier multi-platform specialty distribution company providing high touch, value-added distribution solutions to the maintenance, repair & operations (MRO), the original equipment manufacturer (OEM) and the industrial technologies markets. DSG was formed through the strategic combination of Lawson Products, a leader in MRO distribution of C-parts, Gexpro Services, a leading global supply chain services provider to manufacturing customers, and TestEquity, a leader in electronic test & measurement solutions.
Through its collective businesses, DSG is dedicated to helping customers lower their total cost of operation by increasing productivity and efficiency with the right products, expert technical support and fast, reliable delivery to be a one-stop solution provider. DSG serves approximately 220,000 customers in several diverse end markets supported by approximately 4,300 dedicated employees and strong vendor partnerships. DSG ships from strategically located distribution and service centers to customers in North America, Europe, Asia, South America and the Middle East.
For more information on Distribution Solutions Group, please visit www.distributionsolutionsgroup.com.
This release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the "safe-harbor" provisions under the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. The Terms "aim," "anticipate," "believe," "contemplates," "continues," "could," "ensure," "estimate," "expect," "forecasts," "if," "intend," "likely," "may," "might," "objective," "outlook," "plan," "positioned," "potential," "predict," "probable," "project," "shall," "should," "strategy," "will," "would," and variations of them and other words and terms of similar meaning and expression (and the negatives of such words and terms) are intended to identify forward-looking statements.
Forward-looking statements can also be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks, uncertainties and assumptions, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. DSG can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and DSG cautions readers not to place undue reliance on such statements. DSG undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise. Each forward-looking statement speaks only as of the date on which such statement is made, and DSG undertakes no obligation to update any such statement to reflect events or circumstances arising after such date. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Factors that could cause or contribute to such differences or that might otherwise impact DSG's business, financial condition and results of operations include the risks that DSG may encounter difficulties integrating the business of DSG with the business of other companies that DSG has combined with or may otherwise combine with and that certain assumptions with respect to such business or transactions could prove to be inaccurate. Certain risks associated with DSG's business are also discussed from time to time in the reports DSG files with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K or other reports the Company may file from time to time with the Securities and Exchange Commission, which should be reviewed carefully.
-TABLES FOLLOW-
Distribution Solutions Group, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share data)
(Unaudited)
March 31, 2026
December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents
$
52,729
$
61,753
Restricted cash
12,268
13,573
Accounts receivable, less allowances
306,700
271,331
Inventories
373,512
353,374
Prepaid expenses and other current assets
45,699
46,893
Total current assets
790,908
746,924
Property, plant and equipment, net
126,792
126,605
Rental equipment, net
39,230
38,956
Goodwill
474,529
467,905
Deferred tax asset, net
2,205
1,196
Customer relationships intangibles, net
138,569
143,503
Trade names and other intangibles, net
79,542
82,552
Cash value of life insurance
21,424
21,567
Right of use operating lease assets
108,938
111,117
Other assets
7,867
8,296
Total assets
$
1,790,004
$
1,748,621
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
167,929
$
151,234
Current portion of long-term debt
35,422
35,470
Current portion of lease liabilities
20,913
20,624
Accrued expenses and other current liabilities
76,830
84,137
Total current liabilities
301,094
291,465
Long-term debt, less current portion, net
696,668
664,196
Lease liabilities
96,412
98,821
Deferred tax liability, net
22,506
20,147
Other liabilities
25,217
24,645
Total liabilities
1,141,897
1,099,274
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 - 47,876,937 and 47,860,312 shares, respectively
Outstanding - 46,192,457 and 46,180,700 shares, respectively
46,192
46,180
Capital in excess of par value
688,619
686,183
Retained deficit
(33,312
)
(33,694
)
Treasury stock – 1,684,480 and 1,679,612 shares, respectively
(44,063
)
(43,998
)
Accumulated other comprehensive income (loss)
(9,329
)
(5,324
)
Total stockholders' equity
648,107
649,347
Total liabilities and stockholders' equity
$
1,790,004
$
1,748,621
Distribution Solutions Group, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2026
2025
Revenue
$
495,995
$
478,029
Cost of goods sold
332,656
314,049
Gross profit
163,339
163,980
Selling, general and administrative expenses
149,709
143,883
Operating income (loss)
13,630
20,097
Interest expense
(12,171
)
(14,215
)
Change in fair value of earnout liabilities
—
(1,000
)
Other income (expense), net
(702
)
632
Income (loss) before income taxes
757
5,514
Income tax expense (benefit)
375
2,253
Net income (loss)
$
382
$
3,261
Basic income (loss) per share of common stock
$
0.01
$
0.07
Diluted income (loss) per share of common stock
$
0.01
$
0.07
Basic weighted average shares outstanding
46,190,598
46,601,426
Diluted weighted average shares outstanding
47,030,280
47,400,378
Distribution Solutions Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Three Months Ended March 31,
2026
2025
Operating activities
Net income (loss)
$
382
$
3,261
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization
19,724
19,979
Amortization of debt issuance costs
439
902
Stock-based compensation
2,424
974
Deferred income taxes
(31
)
476
Change in fair value of earnout liabilities
—
1,000
(Gain) loss on sale of rental equipment
(1,438
)
(1,026
)
(Gain) loss on sale of property, plant and equipment
80
(15
)
Charge for step-up of acquired inventory
24
—
Net realizable value adjustment and write-offs for obsolete and excess inventory
1,135
1,779
Bad debt expense
1,007
437
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
(32,943
)
(29,587
)
Inventories
(21,251
)
(1,822
)
Prepaid expenses and other current assets
102
(4,965
)
Accounts payable
16,295
7,735
Accrued expenses and other current liabilities
(5,926
)
(2,957
)
Other changes in operating assets and liabilities
(382
)
(933
)
Net cash provided by (used in) operating activities
(20,359
)
(4,762
)
Investing activities
Purchases of property, plant and equipment
(3,364
)
(5,646
)
Proceeds from sale of property, plant and equipment
—
990
Business acquisitions, net of cash acquired
(16,241
)
—
Purchases of rental equipment
(5,548
)
(2,861
)
Proceeds from sale of rental equipment
3,329
2,464
Net cash provided by (used in) investing activities
(21,824
)
(5,053
)
Financing activities
Proceeds from revolving lines of credit
139,496
93,502
Payments on revolving lines of credit
(98,474
)
(65,334
)
Payments on term loans
(8,750
)
(10,063
)
Repurchase of common stock
3
(11,203
)
Shares repurchased held in treasury
(70
)
—
Stock option exercises
—
877
Payment of financing lease principal
(159
)
(146
)
Net cash provided by (used in) financing activities
32,046
7,633
Effect of exchange rate changes on cash and cash equivalents
(192
)
493
Increase (decrease) in cash, cash equivalents and restricted cash
(10,329
)
(1,689
)
Cash, cash equivalents and restricted cash at beginning of period
75,326
81,726
Cash, cash equivalents and restricted cash at end of period
$
64,997
$
80,037
Cash and cash equivalents
$
52,729
$
65,442
Restricted cash
12,268
14,595
Total cash, cash equivalents and restricted cash
$
64,997
$
80,037
Distribution Solutions Group, Inc.
Table 1 - Selected Segment Financial Data
(Dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
2026
2025
Revenue:
Lawson Products
$
123,736
$
120,462
Canada Branch Division
51,022
50,543
Gexpro Services
117,648
118,905
TestEquity
204,176
188,773
Intersegment revenue elimination
(587
)
(654
)
Total
$
495,995
$
478,029
Operating income (loss):
Lawson Products
$
3,056
$
6,316
Canada Branch Division
386
651
Gexpro Services
8,401
11,241
TestEquity
4,047
4,130
All Other
(2,260
)
(2,241
)
Total
$
13,630
$
20,097
DISTRIBUTION SOLUTIONS GROUP, INC.
SEC REGULATION G GAAP RECONCILIATIONS
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company's management believes that certain non-GAAP financial measures may provide users of this financial information with additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflections of underlying trends of the business because they provide a comparison of historical information that excludes certain non-operational or non-cash items that impact the overall comparability. See Tables below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 31, 2026 and 2025 and the three months ended December 31, 2025. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.
Distribution Solutions Group, Inc.
Table 2 - Reconciliation of GAAP Net Income (Loss) and GAAP Operating Income (Loss) to
Non-GAAP Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
December 31,
2026
2025
2025
Net income (loss)
$
382
$
3,261
$
(6,371
)
Income tax expense (benefit)
375
2,253
25
Other income (expense), net
702
(632
)
1,123
Change in fair value of earnout liabilities
—
1,000
—
Interest expense
12,171
14,215
12,944
Operating income (loss)
13,630
20,097
7,721
Depreciation and amortization
19,724
19,979
20,520
Stock-based compensation(1)
2,424
974
2,048
Severance and acquisition related retention expenses(2)
1,141
1,628
1,403
Acquisition related costs(3)
753
108
178
Inventory step-up(4)
24
—
—
Other non-recurring(5)
137
—
3,567
Non-GAAP adjusted EBITDA
$
37,833
$
42,786
$
35,437
Operating income (loss) as a percent of revenue
2.7
%
4.2
%
1.6
%
Adjusted EBITDA as a percent of revenue
7.6
%
9.0
%
7.4
%
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.
Transaction and integration costs related to acquisitions.
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.
Distribution Solutions Group, Inc.
Table 3 - 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
March 31, 2026
March 31, 2025
December 31, 2025
Amount
Diluted EPS(2)
Amount
Diluted EPS(2)
Amount
Diluted 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.
Distribution Solutions Group, Inc.
Table 4 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted Operating Income
(Dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
December 31,
2026
2025
2025
Operating income (loss)
$
13,630
$
20,097
$
7,721
Gross profit adjustments:
Inventory step-up(1)
24
—
—
Total gross profit adjustments
24
—
—
Selling, general and administrative expenses adjustments:
Acquisition related costs(2)
753
108
178
Amortization of intangible assets
11,004
11,585
11,600
Stock-based compensation(3)
2,424
974
2,048
Severance and acquisition related retention expenses(4)
1,141
1,628
1,403
Other non-recurring(5)
137
—
3,567
Total selling, general and administrative adjustments
15,459
14,295
18,796
Total adjustments
15,483
14,295
18,796
Non-GAAP adjusted operating income
$
29,113
$
34,392
$
26,517
Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed.
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.
Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items.
Distribution Solutions Group, Inc.
Table 5 - Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Adjusted EBITDA
Q1 2026 and Q1 2025
(Dollars in thousands)
(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
Adjustments:
Acquisition related costs(1)
24
102
36
265
50
(293
)
643
—
—
34
753
108
Stock-based compensation(2)
938
523
365
—
688
168
—
—
433
283
2,424
974
Severance and acquisition related retention expenses(3)
745
814
96
16
181
678
119
119
—
1
1,141
1,628
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
%
(1)
Transaction and integration costs related to acquisitions.
(2)
Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company's stock price.
(3)
Includes severance expense from actions taken not related to a formal restructuring plan and acquisition related retention expenses.
(4)
Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed.
(5)
Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items.
N/M
-
Not meaningful
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