Distribution Solutions Group on Thursday reported losses in both its full-year and fourth quarter financial results despite sharply higher revenue numbers over both periods.
The Fort Worth-based distributor, formed by the 2022 combination of Lawson Products, Gexpro Services and TestEquity, posted $1.57 billion in 2023 sales, a 36% increase compared to the total calculated for the previous year; in the final quarter of the year, DSG reported $405 million in sales, an increase of 23% over October-December of last year.
The fourth quarter, however, also saw a net loss of more than $16 million, which brought the company’s full-year net loss to nearly $9 million.
DSG officials highlighted gross profits that grew from $391 million in 2022 to $552 million last year, as well as 3% organic growth amid a “choppy sales environment in a few end markets.” Executives also said its $157 million in adjusted EBITDA was up nearly 28%, which translated to adjusted EBITDA margins of 10%.
The company blamed the fourth-quarter decline on “isolated” economic headwinds, including sluggish capital spending amid higher interest rates, delayed maintenance spending — primarily in the renewable energy segment — and “softness” in the technology market.
DSG Chairman and CEO Bryan King said the company took deliberate actions last year to bolster its return profile and create value over the long term – mostly notably through its June acquisition of Hisco. King called the year a “very successful” one by “most any standard.”
“As evidenced in 2023, our asset-light model that generates meaningful cash flow allows us to re-invest into high ROI initiatives and accretive acquisitions as we further drive long-term shareholder value,” King said in a statement.
DSG came in at no. 18 on ID’s most recent Big 50 list.
