Fort Worth, TX-based Distribution Solutions Group reported its 2024 fourth quarter and full-year financial results on March 6, which showed a major increase in 4Q sales year-over-year, while full-year sales likewise improved.

4Q Results

MRO, OEM and industrial technologies distributor posted 4Q total sales of $480 million, including $61 million of partial-year revenue from five acquisitions closed in 2024. Sales were up 18.6% year-over-year and up 2.7% sequentially. Organic sales increased 3.5% year-over-year but declined 2.2% from 3Q24.

DSG’s 4Q adjusted EBITDA was $44.9 million, on a 9.3% margin, compared to $33.9 million on an 8.4% margin from the same period a year prior. Sequentially, adjusted EBITDA decreased by $4.2 million year-over-year and likewise decreased as a percentage of sales by 120 basis points.

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The company closed on its acquisition of ConRes Test Equipment and Tech-Component Resources during the fourth quarter, which expanded its service offerings. Additionally, DSG acquired Peoria Pump, announced on Nov. 4. It marked the company’s entry into Illinois and its ninth state of operation across the greater U.S. Midwest and Great Plains, joining Minnesota, Iowa, Michigan, Montana, Nebraska, North Dakota and South Dakota.

“As expected, inclusion of the 2024 Source Atlantic acquisition compressed our net margins by approximately 50bps for the quarter,” DSG CEO and Chairman Bryan King said in the company’s financial release. “During the quarter we generated cash flow from operations of $45.7 million. Sequentially compared to the third quarter, total sales grew by 2.7% while, as expected, Adjusted EBITDA contracted due to fewer selling days and a full quarter of the Source Atlantic acquisition that initially has a lower margin profile that we will be expanding.”

MDM’s 4Q24 MarketPulse Report (store link) 

By DSG business unit in 4Q:

• Lawson Products logged sales of $111 million, up from $109 million year-over-year.
• Gexpro Services’ sales of $118 million were up compared to $93 million of a year prior, and up from 3Q’s $116 million.
• Canada Branch Division sales of $59 million increased from 4Q24’s $13 million. DSG said its added this new segment with a focus on the Canadian MRO market. The segment includes the results of Source Atlantic and Bolt House Supply.
• TestEquity sales of $191 million increased from $190 million year-over-year, but decreased from 3Q24’s 4207 million.

2024 Results

DSG posted full-year total sales of $1.8 billion, including $268.2 million of partial-year revenue from five acquisition closed in 2024 and one acquisition closed in 2023, which was not in for the full-year of 2023. Sales were up 14.9% year-over-year. Organic sales decreased 2.6% compared to the year prior.

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The company’s full-year adjusted EBITDA was $175.3 million, on a 9.7% margin, compared to $157 million on a 10.0% margin of 2023. Excluding the Source Atlantic acquisition, adjusted EBITDA as a percentage of sales would have been 9.9%.

By DSG business unit in 2024:

• Lawson Products logged sales of $469 million, up from $468 million a year earlier
• Gexpro Services’ sales of $440 million were up compared to $405 million a year earlier
• Canada Branch Division sales of $125 million increased from 2023’s $55 million
• TestEquity sales of $771 million increased from $641 million year-over-year, but decreased from 3Q24’s 4207 million

In the Store: MDM’s U.S. MRO Market Trends Report 

King added: “We remain highly focused on long-term value creation through the growth of our industrial distribution platform and the compounding effect of our cash flow reinvestment. We continue to build a structurally higher-margin business by strategically scaling our platform through organic growth and highly strategic M&A. Our acquisitions are targeted to improve and expand our high-touch, value-added distribution solutions to the MRO, OEM and Industrial Technologies verticals in a diversified set of end markets.”