Distribution Solutions Group’s recent acquisition of Hisco is paying off. On Aug. 4, DSG announced its 2023 second-quarter earnings, which showed 2Q revenues of nearly $378 million, a 17.6% increase over the same period in 2022.
In June, Chicago-based DSG announced that it completed a $270-million acquisition of Hisco, a distributor of specialty products serving high growth industrial technology applications.
Operating income for 2Q was $13.7 million, a 239.4% increase over the same quarter last year. Adjusted EBITDA was approximately $40 million, a 26.7% jump.
“Our second quarter included just over three weeks of Hisco results, which we acquired in June, and we are well underway integrating Hisco’s business into DSG,” said Bryan King, CEO and Chairman of the Board. “Combining Hisco into our TestEquity business expands our customer base, geographic reach and product offerings while driving additional scale and cost synergies to the entire DSG platform.”
King added, “We are closely monitoring the demand environment in light of continued tightening of monetary policy to emphasize on growth segments to drive revenues. While certain end markets moderated somewhat during the second quarter, we continue to invest in those initiatives we believe will fuel profitable growth across the DSG companies. Our asset light business model, combined with our focus on growing operating cash flows and accelerating returns on invested capital, positions us well to enhance long-term shareholder value.”
Revenue numbers included $43.4 million of additional revenue from companies acquired in 2022 and 2023 other than Lawson Products. In May 2022, after completing its merger with distributor TestEquity and supply chain solutions provider Gexpro Services, Chicago-based Lawson Products announced it had changed its name to Distribution Solutions Group.
“Our business delivered outstanding results during the second quarter as total revenue grew by 17.6%,” Kind said. “GAAP operating income more than tripled and adjusted EBITDA increased by $8.4 million or nearly 27%, representing 10.6% of revenue. We continued to expand our margin profile with strong execution and performance during the first half of 2023 driven by broad-based contributions across our market leading businesses. We continue to strategically focus on generating shareholder value by driving sales growth, improving profitability and generating incremental cash flow.”
For MDM’s 2023 Top Distributors Lists, DSG ranked No. 27 among Industrial Distributors, while Hisco ranked No. 39. Those rankings don’t reflect the newly-combined company because MDM’s lists were finalized before the deal closed. DSG would be ranked No. 22 if the lists were finalized after the deal closed.