Newly formed MRO and OEM distributor Distribution Solutions Group reported sharply higher sales but a loss per diluted share in its debut quarterly earnings report.
DSG, formed by the combination of Lawson Products, Gexpro Services and TestEquity, disclosed numbers for its component businesses — both before and after their April 1 merger — according to generally accepted accounting principles. The company said its GAAP net sales more than doubled from $134 million between all three companies in the same quarter last year to $321 million between April and July — an increase of 140%.
Non-GAAP adjusted net sales were up 33.5% compared to the same quarter last year. The company reported 11.8% organic growth and more than $52 million in sales from other acquisitions.
DSG’s GAAP operating income, however, was $4.1 million — amounting to 1.3% of sales, which the company attributed to merger-related costs and increased stock-based compensation. The Lawson segment reported an operating loss of more than $2.5 million; the company overall saw its earnings per diluted share flip from a combined $0.04 in the second quarter of 2021 to a loss of $0.23 per share in the latest reporting period.
Company officials nonetheless said they were optimistic about the company’s future after a strong debut quarter.
“Each of the operating companies made significant progress giving us further confidence in our overall strategy and our teams, and raising our excitement about the future of the combined DSG business," Chairman and CEO Bryan King said in a statement.