Q2 2024 Distribution Solutions Group Inc Earnings Call Transcript
Key Points
- Distribution Solutions Group Inc (DSGR) achieved a record consolidated sales of $440 million in the second quarter, marking a 16.3% increase compared to the previous year, driven by acquisition-related revenue.
- The company's EBITDA margins improved sequentially from 8.7% in the first quarter to 10.3% in the second quarter, with all three verticals experiencing margin improvements.
- DSGR announced the acquisition of Source Atlantic, a leading industrial distributor in Canada, which is expected to enhance their market presence and capabilities in the Canadian market.
- The company is actively working on process improvement and structural optimization initiatives to enhance profitability and operational efficiencies.
- DSGR's leadership is committed to making the company a long-term compounder for shareholders, focusing on financial growth and strategic positioning in the specialty distribution market.
- Organic sales for DSGR declined by 5.7% compared to the previous year, indicating challenges in the current market environment.
- The company is facing sustained macroeconomic headwinds, including higher interest rates, which are negatively impacting industrial end markets in the US.
- The TestEquity Group's Test and Measurement business experienced a decline in sales, although there are signs of recovery.
- The Lawson segment saw a decrease in organic sales due to softness in various end markets and a lower field rep count.
- Source Atlantic, the newly acquired company, currently operates at lower margins than DSGR, which may initially impact consolidated margins until synergies are realized.
Good day, and welcome to the Distribution Solutions Group second-quarter 2024 Earnings Conference Call. At this time all participants are in a listen-only mode and a question-and-answer session will follow the formal presentation.(Operator Instructions). Please note this conference is being recorded.
I will now turn the conference over to your host, Steven Hooser with Three Part Advisors. Sir, you may begin.
Good morning everyone, and welcome to the Distribution Solutions Group's second quarter 2024 earnings call. Joining me on today's call are DSG's Chairman and Chief Executive Officer, Bryan King; and Executive Vice President and Chief Financial Officer, Ron Knutson. In conjunction with today's call, we have provided a financial results slide deck that is posted on the company's IR website at investor.dstributionsolutionsgroup.com.
Please note that statements on this call and in today's press release contain forward-looking statements concerning goals, beliefs, expectations, strategies
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