Company Achieved 3.8% First Quarter Revenue Growth
FORT WORTH, Texas--(BUSINESS WIRE)--April 30, 2026--
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
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March 31, December 31,
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(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)
-- Revenue increased $18.0 million or 3.8% to $496.0 million, primarily
driven by organic sales growth of 3.6% and $0.8 million of 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. Gross margin decreased from
34.3% to 32.9% primarily due to customer and vertical sales mix shifts
and higher tariff rates on inbound shipments partially offset by pricing
benefits realized.
-- Operating income was $13.6 million, net of $11.0 million of non-cash
acquired intangible amortization and $4.5 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 which is net of $11.6 million of intangible amortization and $2.7
million of non-recurring items. Adjusted operating income, excluding
these non-cash and non-recurring items, was $29.1 million in the current
quarter compared to $34.4 million in the year-ago quarter and $26.5
million in the fourth quarter of 2025.
-- Net income was $0.4 million for the quarter compared to net income of
$3.3 million in the year-ago quarter.
-- Adjusted EBITDA was $37.8 million, or 7.6% of sales, compared to $42.8
million, 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.
-- 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 for the fourth quarter of 2025.
-- Cash used in operations was $20.4 million for the quarter. Uses of cash
for the quarter included net capital expenditures of $5.6 million.
-- The Company ended the quarter with total liquidity of $415.2 million,
consisting of $65.0 million of cash (restricted and unrestricted) and
$350.2 million available under its credit facility with net debt leverage
of 3.8x.
-- Completed the acquisition of Eastern Valve & Control Specialties Ltd.,
a provider of industrial valve products and related services supporting
customers across Atlantic Canada.
(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.
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