MRO, OEM and industrial technology products supplier Distribution Solutions Group reported its 1Q26 financial results on April 30, showing a year-over-year and sequential improvement in top-line sales growth, while profit margins tightened. 

DSG posted 1Q26 total sales of $496 million, up 3.8% year-over-year, with organic sales up 3.6%. The overall figure was an acceleration from 4Q25’s near-flat 0.2%, while sequential organic sales grew 2.8% and grew 3.7% on a daily sales basis.

The company’s 1Q26 gross margin of 32.9% fell 140 basis points year-over-year and dipped 20 points sequentially. Operating profit of $13.6 million fell 32.2% YoY; net profit was flat ($3.3M a year earlier); and adjusted EBITDA of $37.8 million on 7.6% margin was down from the $42.8 million/9.0% margin of a year earlier.

The company noted an improving macro environment, with continuing momentum in key end markets of aerospace & defense, technology and industrial power. Meanwhile, it said demand slowed in North America renewables.

By business unit in 1Q26

Lawson Products (VMI MRO focus, 24% of total) revenue of $120.5 million grew 2.7% YoY. DSG said the unit’s organic average daily sales grew 2.7% across a majority of customer segments YoY and 4.4% sequentially. Operating profit of $3 million was less than half of the $6.3 million of a year earlier. Adjusted EBITDA was $11.6 million, with 9.3% margin down 260 bps YoY but up 260 bps from 4Q25.

Canada Branch Division (MRO focus, 10% of total) revenue of $51 million increased 0.9% YoY, with organic average daily sales down 0.6%. Adjusted EBITDA was $2.8 million, with 5.5% margin up 30 bps YoY and down 110 bps sequentially.

Gexpro Services (OEM focus, 24% of total) revenue of $118 million dipped 1% YoY, with organic average daily sales up 0.6% and up 6.7% sequentially. Operating profit of $8.4 million trailed the $11.2 million of a year earlier. Adjusted EBITDA was $12 million, with margin of 10.2% down 240 bps YoY and down 150 bps sequentially.

TestEquity (Industrial Technologies focus, 41% of total) revenue of $204 million increased 8.2% YoY, with organic average daily sales up 9.9% YoY and up 5.8% sequentially. Operating profit of $4 million was flat. Adjusted EBITDA was $13.2 million, with margin of 6.5% down 30 bps YoY and up 10 bps sequentially.

Distribution Solutions Group Acquires Valve Provider in Newfoundland (March 10)

DSG was formed in early 2022 through a strategic merger of Lawson Products, Gexpro Services and TestEquity.

Take-Private Offer

On March 16, DSG acknowledged that it received an unsolicited, non-binding proposal from LKCM Headwater Investments to acquire the remaining outstanding shares of DSG that LKCM doesn’t already own at a price of $29.50 per share. LKCM currently owns about 79% of DSG’s shares, and the company has about 46 million shares outstanding.

On April 28, DSG said it opted to not host a conference call to discuss its 1Q26 results given the take-private proposal, but didn’t share any other update on the matter.

Both DSG and LKCM are headquartered in Fort Worth, TX.