Distribution Solutions reports Q4 EPS 22c, consensus 14c

Reports Q4 revenue $405.2M, consensus $419M…Bryan King, CEO and Chairman of the Board said, “By most any standard, 2023 was a very successful year for Distribution Solutions Group. The Company’s profitability grew significantly while also generating over $102M of cash from operations. We expanded topline revenue to $1.6 billion, up more than 36%. Comparable sales, including Lawson for all periods, increased almost 24% for the full year despite a choppy sales environment in a few end markets, resulting in 3% organic growth. On a two-year stacked basis, organic revenue grew by almost 17%. For the full year, we ended with $157M in adjusted EBITDA, up nearly 28%, and our adjusted EBITDA margins were 10.0%, a testament to DSG’s ability to create value by broadening our scale and footprint…”Fourth quarter revenue grew by 23% primarily due to acquired revenue from Hisco. Although our organic revenue contracted by 6%, our two-year stacked organic revenue grew by 10%. The current quarter decline was primarily due to continued softness in the technology end-market, delayed maintenance spend most notable in the renewable end-market, and delayed capital spending in the current interest-rate sensitive environment. Excluding these end markets, organic revenue grew by approximately 1% in the fourth quarter. This gives us confidence that business headwinds are isolated to these categories, mostly within the OEM and Industrial Technology verticals. Macroeconomic impacts and seasonally fewer selling days negatively impacted the margin profile of certain verticals for the quarter,” concluded Mr. King.