0000703604-23-000086 | 10-Q | XBRL Viewer | Distribution Solutions Group INC

(2,537)

171

^[1]

12,129

Tax withholdings related to net share settlements of stock-based compensation awards (in shares)

$ 11

^[1]

(11)

^[1]

(1,777)

Tax withholdings related to net share settlements of stock-based compensation awards

(33)

Balance at end of period (in shares) at Mar. 31, 2022

(95)

^[1]

20,600,000

Balance at end of period at Mar. 31, 2022

163,308

$ 20,647

^[1]

186,666

(35,679)

(10,066)

1,740

Balance at beginning of year (in shares) at Dec. 31, 2021

^[1]

20,589,648

Balance at beginning of year at Dec. 31, 2021

165,769

$ 20,636

^[1]

186,739

(33,142)

(10,033)

1,569

Increase (Decrease) in Stockholders' Equity [Roll Forward]

9,289

Balance at end of period (in shares) at Sep. 30, 2022

(12,094)

^[1]

38,800,010

Balance at end of period at Sep. 30, 2022

546,747

$ 38,847

^[1]

554,753

(23,853)

(12,475)

(10,525)

Balance at beginning of year (in shares) at Mar. 31, 2022

^[1]

20,600,000

Balance at beginning of year at Mar. 31, 2022

163,308

$ 20,647

^[1]

186,666

(35,679)

(10,066)

1,740

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(4,715)

(2,491)

573

^[1]

51,364

Tax withholdings related to net share settlements of stock-based compensation awards (in shares)

$ 52

^[1]

(52)

^[1]

(3,734)

Tax withholdings related to net share settlements of stock-based compensation awards

(78)

$ (4)

^[1]

(78)

Shares issued related to acquisitions (in shares)

^[1]

18,240,334

Shares issued related to acquisitions

351,491

$ 18,240

^[1]

333,251

Reclassification of issuable shares from earnout derivative liability

26,593

Fair value adjustment of stock-based compensation awards

1,910

Settlement of related party liability

5,276

Balance at end of period (in shares) at Jun. 30, 2022

(39)

^[1]

38,887,964

Balance at end of period at Jun. 30, 2022

541,828

$ 38,935

^[1]

554,182

(40,394)

(10,144)

(751)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

16,541

(9,774)

489

^[1]

35,984

Repurchase of common stock (in shares)

$ 0

$ 36

^[1]

(36)

(108,178)

^[1]

Repurchase of common stock

$ 1,940

$ 108

^[1]

(108)

1,940

Tax withholdings related to net share settlements of stock-based compensation awards (in shares)

^[1]

(15,760)

Tax withholdings related to net share settlements of stock-based compensation awards

(391)

$ (16)

^[1]

(391)

Balance at end of period (in shares) at Sep. 30, 2022

(6)

^[1]

38,800,010

Balance at end of period at Sep. 30, 2022

$ 546,747

$ 38,847

^[1]

554,753

(23,853)

(12,475)

(10,525)

Balance at beginning of year (in shares) at Dec. 31, 2022

39,460,724

38,833,568

^[1]

Balance at beginning of year at Dec. 31, 2022

$ 562,995

^[2]

$ 38,834

^[1]

572,379

(25,736)

(12,526)

(9,956)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

5,907

2,624

Stock-based compensation liability paid in shares

773

227

^[1]

22,288

Shares issued - earnout (in shares)

$ 22

^[1]

(22)

^[1]

3,400,000

Shares issued - earnout

$ 3,400

^[1]

(3,400)

Tax withholdings related to net share settlements of stock-based compensation awards (in shares)

^[1]

(5,278)

Tax withholdings related to net share settlements of stock-based compensation awards

(117)

$ (5)

^[1]

(117)

Balance at end of period (in shares) at Mar. 31, 2023

204

(4)

(200)

^[1]

42,250,578

Balance at end of period at Mar. 31, 2023

$ 572,409

$ 42,251

^[1]

570,166

(19,833)

(12,643)

(7,532)

Balance at beginning of year (in shares) at Dec. 31, 2022

39,460,724

38,833,568

^[1]

Balance at beginning of year at Dec. 31, 2022

$ 562,995

^[2]

$ 38,834

^[1]

572,379

(25,736)

(12,526)

(9,956)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

7,363

Repurchase of common stock (in shares)

$ 128

Balance at end of period (in shares) at Sep. 30, 2023

47,479,256

46,844,598

^[1]

Balance at end of period at Sep. 30, 2023

$ 676,109

^[2]

$ 46,845

^[1]

670,287

(18,377)

(12,697)

(9,949)

Balance at beginning of year (in shares) at Mar. 31, 2023

^[1]

42,250,578

Balance at beginning of year at Mar. 31, 2023

572,409

$ 42,251

^[1]

570,166

(19,833)

(12,643)

(7,532)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

3,024

1,083

Issuance of common stock in rights offering, net of offering costs of $1,531 (in shares)

1,062

^[1]

4,444,444

Issuance of common stock in rights offering, net of offering costs of $1,531

98,469

$ 4,444

^[1]

94,025

^[1]

6,672

Tax withholdings related to net share settlements of stock-based compensation awards (in shares)

$ 7

^[1]

(7)

^[1]

(2,224)

Tax withholdings related to net share settlements of stock-based compensation awards

(54)

$ (2)

^[1]

(54)

Balance at end of period (in shares) at Jun. 30, 2023

385

^[1]

46,699,470

Balance at end of period at Jun. 30, 2023

675,993

$ 46,700

^[1]

665,633

(16,809)

(12,697)

(6,834)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(1,568)

(3,579)

1,119

^[1]

520

Repurchase of common stock (in shares)

$ 0

$ 1

^[1]

(1)

Shares issued related to acquisitions (in shares)

^[1]

144,608

Shares issued related to acquisitions

$ 3,253

$ 144

^[1]

3,109

Compensation expense related to employee share purchases

427

Balance at end of period (in shares) at Sep. 30, 2023

$ 464

464

47,479,256

46,844,598

^[1]

Balance at end of period at Sep. 30, 2023

$ 676,109

^[2]

$ 46,845

^[1]

$ 670,287

$ (18,377)

$ (12,697)

$ (9,949)

[1]	(1) The accompanying Unaudited Condensed Consolidated Financial Statements and notes thereto have been retroactively adjusted to reflect the two-for-one stock split completed in August 2023. See Note 1 – Nature of Operations and Basis of Presentation for details
[2]	(1) The accompanying Unaudited Condensed Consolidated Financial Statements and notes thereto have been retroactively adjusted to reflect the two-for-one stock split completed in August 2023. See Note 1 – Nature of Operations and Basis of Presentation for details.

Stock-Based Compensation - Stock Options (Details) - USD ($) $ in Millions	1 Months Ended	9 Months Ended
	Apr. 30, 2022	Sep. 30, 2023
Stock-Based Compensation Details
Vesting period (in years)		5 years
Stock option per share of common stock (in shares)	1
Unrecognized compensation		$ 10.0
Stock options
Stock-Based Compensation Details
Shares issued (in shares)		1,354,000
Period for recognition (in years)		2 years 3 months 18 days
Granted
Stock-Based Compensation Details
Grant date fair value		$ 9.6

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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Deferred Revenue Disclosure [Abstract]

Leases - Net Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating Lease Expense	$ 5,850	$ 4,519	$ 14,980	$ 10,581
Financing Lease Amortization	133	207	393	471
Financing Lease Interest	23	37	65	68
Financing Lease Expense	156	244	458	539
Net Lease Cost	$ 6,006	$ 4,763	$ 15,438	$ 11,120

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2023
Accounting Policies [Abstract]
Accounting Pronoucements - Adopted	Note 2 – Summary of Significant Accounting Policies There were no significant changes to the Company's accounting policies from those disclosed in DSG's Annual Report on Form 10-K for the year ended December 31, 2022. See Note 2 of the 2022 consolidated financial statements included in DSG's Annual Report on Form 10-K for the year ended December 31, 2022 for further details of the Company's significant accounting policies. Accounting Pronouncements - Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises the requirements for how an entity should measure credit losses on financial instruments. The pronouncement was effective for smaller reporting companies in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and the new guidance will be applied on a prospective basis. The Company adopted this guidance on January 1, 2023. The adoption had no material impact on the Company's financial condition, results of operations or cash flows. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an entity to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The pronouncement is effective in fiscal years beginning after December 15, 2022 and early adoption is permitted. The Company adopted this guidance on January 1, 2023. The adoption had no impact on the Company's financial condition, results of operations or cash flows and will be applied to business combinations on or after the adoption date.

Revenue Recognition

9 Months Ended

Sep. 30, 2023

Revenue Recognition

Note 4 – Revenue Recognition

Under the definition of a contract as defined by ASC 606, the Company considers contracts to be created at the time an order to purchase product and services is agreed upon regardless of whether there is a written contract. Revenue from customers is recognized when obligations under the terms of a contract are satisfied; this generally occurs with the delivery of products or services. Revenue from customers is measured as the amount of consideration the Company expects to receive in exchange for the delivery of products or services. Contracts may last from one month to one year or more and may have renewal terms that extend indefinitely at the option of either party. Price is typically based on market conditions, competition, changes in the industry and product availability. Volumes fluctuate primarily as a result of customer demand and product availability. Consistent with the way the Company manages its businesses, the Company refers to sales under service agreements, which includes both products (such as parts, equipment and equipment upgrades) and related services (such as monitoring, maintenance and repairs) as sales of “services,” which is an important part of the Company’s operations. The Company has no significant financing components in its contracts with customers. The Company records revenue net of certain taxes, such as sales taxes, that are assessed by governmental authorities on the Company’s customers.

The Company also operates as a lessor and recognizes lease revenue on a straight-line basis over the life of each lease. The Company has adopted the practical expedient not to separate the non-lease components that would be within the scope of ASC 606 from the associated lease component as the relevant criteria under ASC 842 are met.

The Company does not incur significant costs to obtain contracts. Incidental items that are immaterial in the context of the contract are recognized as expenses. Sales of products and services to customers are invoiced and settled on a monthly basis. ASC 606 requires an entity to present a contract liability in instances where the customer is entitled to a volume rebate based on purchases made during the period. The Company is not usually subject to obligations for warranties, rebates, returns or refunds except in the case of rebates for select customers if predetermined purchase thresholds are met as discussed for the TestEquity segment below. The Company does not typically receive payment in advance of satisfying its obligations under the terms of its sales contracts with customers; therefore, liabilities related to such payment are not significant to the Company. Accounts receivable represents the Company’s unconditional right to receive consideration from its customers.

Lawson Segment

The Lawson segment has two distinct performance obligations offered to its customers: a product performance obligation and a service performance obligation, and accordingly, two separate revenue streams. Although Lawson has identified that it offers its customers both a product and a service obligation, the customer only receives one invoice per transaction with no

price allocation between these obligations. Lawson does not price its offerings based on any allocation between these obligations.

Lawson generates revenue primarily from the sale of MRO products to its customers. Revenue related to product sales is recognized at the time that control of the product has been transferred to the customer; either at the time the product is shipped or the time the product has been received by the customer. Lawson does not commit to long-term contracts to sell customers a certain minimum quantity of products.

Lawson offers a VMI service proposition to its customers. A portion of these services, primarily related to stocking of product and maintenance of the MRO inventory, is provided over a short period of time after control of the purchased product has been transferred to the customer. Since certain obligations pursuant to the VMI service agreement have not been provided at the time the control of the product transfers to the customer, that portion of expected consideration is deferred until the time that those services have been provided and the related performance obligations have been satisfied.

TestEquity Segment

TestEquity’s contracts with customers generally represent a single performance obligation to sell its products. Revenue from contracts with customers reflect the transaction prices for contracts reduced by variable consideration. TestEquity provides a rebate to select customers if pre-determined purchase thresholds are met. The rebate consideration is not in exchange for a distinct product or service. Variable consideration is estimated using the expected-value method considering all reasonably available information, including TestEquity’s historical experience and current expectations, and is reflected in the transaction price when sales are recorded. Sales returns are generally accepted by TestEquity; however, sales returns are not material to the Company’s operations. TestEquity provides an assurance type warranty which is not sold separately and does not represent a separate performance obligation.

TestEquity generates revenue from contracts with customers through the sale of new and used electronic test and measurement products, industrial and electronic production supplies, and adhesive solutions. Typically, TestEquity has a purchase order or master service agreement with the customer that specifies the products and/or services to be provided. TestEquity generally invoices customers as products are shipped. Payment terms on invoiced amounts are typically due and payable 30 days after the date of shipment. Generally, customers gain control of the products upon providing the product to the carrier, or when services are completed. For the majority of transactions, TestEquity recognizes revenue at the time of shipment, when control passes to the customer. For consigned inventory, revenue is recognized when inventory is removed from TestEquity’s stock location and control passes to the customer.

Gexpro Services Segment

Gexpro Services’ contracts with customers generally represent a single performance obligation to sell its products. Revenue from sales of Gexpro Services’ products is recognized upon transfer of control to the customer, which is typically when the product has been shipped from its distribution facilities. The transaction price is the amount of consideration to which Gexpro Services expects to be entitled in exchange for transferring products to the customer. Revenue is recorded based on the transaction price, which includes fixed consideration and an estimate of variable consideration such as, early payment/volume discounts and rebates. The amount of variable consideration included in the transaction price is constrained and is included only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Gexpro Services’ products are marketed and sold primarily to original equipment manufacturers globally. Sales of products are subject to economic conditions and may fluctuate based on changes in the industry, trade policies and financial markets. Payment terms on invoiced amounts range from 10 to 120 days. In instances where the timing of revenue recognition differs from the timing of the right to invoice, the Company has determined that a significant financing component does not exist.

Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to):


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
United States	$	344,920	$	284,771	$	936,289	$	668,504
Canada	35,727		36,879		108,380		82,931
Europe	20,805		13,391		55,261		35,377
Pacific Rim	2,477		2,549		5,468		7,711
Latin America	31,971		8,501		52,839		24,853
Other	3,009		1,060		6,926		3,196
Total revenue	$	438,909	$	347,151	$	1,165,163	$	822,572

Rental Revenue

TestEquity rents new and used electronic test and measurement equipment to customers in multiple industries. These leases are classified as operating leases under ASC 842. Rental equipment is included in Rental equipment, net in the Unaudited Condensed Consolidated Balance Sheet, and rental revenue is included in Revenue in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The unearned rental revenue related to customer prepayments on equipment leases was nominal at September 30, 2023 and December 31, 2022.

Lawson leases parts washer machines to customers through its Torrents leasing program. These leases are classified as operating leases under ASC 842. The leased machines are included in Rental equipment, net, in the Unaudited Condensed Consolidated Balance Sheet, and the leasing revenue is recognized on a straight-line basis and is included in Revenue in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The unearned rental revenue related to customer prepayments on equipment leases was nominal at September 30, 2023 and December 31, 2022.

Rental revenue from operating leases:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Revenue from operating leases	$	4,323	$	5,542	$	12,831	$	13,879

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//606/tableOfContent

Stockholders' Equity - Rights Offering (Details) - Rights Offering - USD ($)	May 30, 2023	May 09, 2023	Sep. 30, 2023
Class of Stock [Line Items]
Proceeds from issuance of common stock	$ 100,000,000	$ 100,000,000
Common stock, shares subscribed but unissued, (in shares)		0.0525
Common stock, value, subscription price		$ 22.50
Stock sold (in shares)	4,444,444
Sale of stock, transaction costs			$ 1,500,000

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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Condensed Financial Information Disclosure [Abstract]

Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Current assets:
Allowance for doubtful accounts \| $	$ 2,288	$ 1,513
LIABILITIES AND STOCKHOLDERS’ EQUITY
Preferred stock, par value (in USD per share) \| $ / shares	$ 1	$ 1
Preferred stock, shares authorized (in shares)	500,000	500,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in USD per share) \| $ / shares	$ 1	$ 1
Common stock, shares authorized (in shares)	70,000,000	70,000,000
Common stock, shares issued (in shares)	47,479,256	39,460,724
Common stock, shares outstanding (in shares)	46,844,598	38,833,568
Treasury stock (in shares)	634,658	627,156

Supplemental Financial Statement Information (Tables)

9 Months Ended

Sep. 30, 2023

Schedule of Inventory

Inventories, net, consisting of purchased products and manufactured electronic equipment offered for resale, were as follows:



(in thousands)	September 30, 2023		December 31, 2022
Inventories, gross	$	329,221	$	275,072
Reserve for obsolete and excess inventory	(15,884)		(10,698)
Inventories, net	$	313,337	$	264,374

Property, Plant and Equipment

Components of property, plant and equipment were as follows:



(in thousands)	September 30, 2023		December 31, 2022
Land	$	16,753	$	9,578
Buildings and improvements	50,009		27,199
Machinery and equipment	48,235		26,948
Capitalized software	9,140		7,889
Furniture and fixtures	10,707		6,346
Vehicles	1,703		1,713
Construction in progress(1)	3,804		3,140
Total	140,351		82,813
Accumulated depreciation and amortization	(28,402)		(18,418)
Property, plant and equipment, net	$	111,949	$	64,395

(1)Construction in progress primarily related to upgrades to certain of the Company's information technology systems that we expect to place in service in the next 12 months.

Rental Equipment, net

Rental equipment, net consisted of the following:



(in thousands)	September 30, 2023		December 31, 2022
Rental equipment	$	63,310	$	63,184
Accumulated depreciation	(36,990)		(36,045)
Rental equipment, net	$	26,320	$	27,139

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


(in thousands)	September 30, 2023		December 31, 2022
Accrued compensation	$	27,532	$	24,094
Deferred acquisition payments and accrued earnout liabilities	16,461		1,383
Accrued severance and acquisition related retention bonus	12,648		927

Accrued and withheld taxes, other than income taxes	8,758		4,885
Accrued stock-based compensation	5,055		3,340
Accrued customer rebates	4,710		5,053
Accrued interest	3,592		1,775
Accrued health benefits	1,743		1,306
Deferred revenue	1,136		2,313
Accrued income taxes	734		731
Other	14,822		16,870
Total accrued expenses and other current liabilities	$	97,191	$	62,677

Other Liabilities

Other liabilities consisted of the following:


(in thousands)	September 30, 2023		December 31, 2022
Security bonus plan	$	9,109	$	9,651
Deferred compensation	10,854		9,962
Other	4,658		4,036
Total other liabilities	$	24,621	$	23,649

Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt Instruments

The Company's outstanding long-term debt was comprised of the following:



(in thousands)	September 30, 2023		December 31, 2022
Senior secured revolving credit facility	$	—	$	122,000
Senior secured term loan	234,375		243,750
Senior secured delayed draw term loan	48,125		50,000
Incremental term loan	305,000		—
Other revolving line of credit	2,085		1,352


Total debt	589,585		417,102
Less current portion of long-term debt	(32,335)		(16,352)
Less deferred financing costs	(6,724)		(4,925)
Total long-term debt	$	550,526	$	395,825

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Goodwill and Intangible Assets Disclosure [Abstract]

Stockholders' Equity - Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023
Equity [Abstract]
Repurchase of common stock (in shares)	0	108,178	0
Compensation expense related to employee share purchases		$ 1,940
Stock repurchased (in USD per share)		$ 17.93
Remaining amount	$ 7,600		$ 7,600

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands		1 Months Ended	3 Months Ended	9 Months Ended
	Aug. 15, 2023	Aug. 31, 2023	Jun. 30, 2023 USD ($) $ / shares	Sep. 30, 2023 USD ($) $ / shares	Mar. 31, 2023 $ / shares	Dec. 31, 2022 $ / shares	Sep. 30, 2022 $ / shares	Jun. 30, 2022 $ / shares	Mar. 31, 2022 $ / shares	Dec. 31, 2021 $ / shares
Statement of Stockholders' Equity [Abstract]
Common stock, par value (in USD per share) \| $ / shares			$ 1	$ 1	$ 1	$ 1	$ 1	$ 1	$ 1	$ 1
Offering costs \| $			$ 1,531	$ 1,531
Stock split ratio, common stock	2	2

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Note 7 – Leases

Activities as Lessee

The Company leases property used for warehousing, distribution centers, office space, branch locations, equipment and vehicles. The expenses generated by leasing activity for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):



		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Type	Classification	2023		2022		2023		2022
Operating Lease Expense (1)	Operating expenses	$	5,850	$	4,519	$	14,980	$	10,581
Financing Lease Amortization	Operating expenses	133		207		393		471
Financing Lease Interest	Interest expense	23		37		65		68
Financing Lease Expense		156		244		458		539
Net Lease Cost		$	6,006	$	4,763	$	15,438	$	11,120

(1) Includes short term lease expense, which is immaterial.

The value of net assets and liabilities related to our operating and finance leases as of September 30, 2023 and December 31, 2022 was as follows (in thousands):


Lease Type	September 30, 2023		December 31, 2022
Total ROU operating lease assets (1)	$	79,791	$	46,755
Total ROU financing lease assets (2)	1,514		1,519
Total lease assets	$	81,305	$	48,274

Total current operating lease liabilities	$	12,711	$	9,480
Total current financing lease liabilities	530		484
Total current lease liabilities	$	13,241	$	9,964

Total long term operating lease liabilities	$	69,558	$	38,898
Total long term financing lease liabilities	795		930
Total long term lease liabilities	$	70,353	$	39,828

(1)Operating lease assets are recorded net of accumulated amortization of $23.2 million as of September 30, 2023 and $14.8 million as of December 31, 2022.

(2)Financing lease assets are recorded net of accumulated amortization as a component of Other assets in the Unaudited Condensed Consolidated Balance Sheet of $1.3 million as of September 30, 2023 and $0.9 million as of December 31, 2022.

The value of lease liabilities related to our operating and finance leases as of September 30, 2023 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total
Remaining 2023	$	5,030	$	165	$	5,195
2024	18,477		558		19,035
2025	18,179		364		18,543
2026	14,406		282		14,688
2027	12,326		95		12,421
Thereafter	40,120		5		40,125
Total lease payments	108,538		1,469		110,007
Less: Interest	(26,269)		(144)		(26,413)
Present value of lease liabilities	$	82,269	$	1,325	$	83,594

The weighted average lease terms and interest rates of leases held as of September 30, 2023 were as follows:


Lease Type	Weighted Average Term in Years	Weighted Average Interest Rate
Operating Leases	6.8	7.8%
Financing Leases	2.8	6.9%

The cash outflows of leasing activity for the nine months ended September 30, 2023 and 2022 were as follows (in thousands):


		Nine Months Ended September 30,
Cash Flow Source	Classification	2023		2022
Operating cash flows from operating leases	Operating activities	$	(9,083)	$	(3,330)
Operating cash flows from financing leases	Operating activities	(186)		37
Financing cash flows from financing leases	Financing activities	(358)		(457)

Refer to Note 4 – Revenue Recognition for a discussion on the Company's activities as lessor.

Leases

Note 7 – Leases

Activities as Lessee



		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Type	Classification	2023		2022		2023		2022
Operating Lease Expense (1)	Operating expenses	$	5,850	$	4,519	$	14,980	$	10,581
Financing Lease Amortization	Operating expenses	133		207		393		471
Financing Lease Interest	Interest expense	23		37		65		68
Financing Lease Expense		156		244		458		539
Net Lease Cost		$	6,006	$	4,763	$	15,438	$	11,120

(1) Includes short term lease expense, which is immaterial.

The value of net assets and liabilities related to our operating and finance leases as of September 30, 2023 and December 31, 2022 was as follows (in thousands):


Lease Type	September 30, 2023		December 31, 2022
Total ROU operating lease assets (1)	$	79,791	$	46,755
Total ROU financing lease assets (2)	1,514		1,519
Total lease assets	$	81,305	$	48,274

Total current operating lease liabilities	$	12,711	$	9,480
Total current financing lease liabilities	530		484
Total current lease liabilities	$	13,241	$	9,964

Total long term operating lease liabilities	$	69,558	$	38,898
Total long term financing lease liabilities	795		930
Total long term lease liabilities	$	70,353	$	39,828

(1)Operating lease assets are recorded net of accumulated amortization of $23.2 million as of September 30, 2023 and $14.8 million as of December 31, 2022.

The value of lease liabilities related to our operating and finance leases as of September 30, 2023 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total
Remaining 2023	$	5,030	$	165	$	5,195
2024	18,477		558		19,035
2025	18,179		364		18,543
2026	14,406		282		14,688
2027	12,326		95		12,421
Thereafter	40,120		5		40,125
Total lease payments	108,538		1,469		110,007
Less: Interest	(26,269)		(144)		(26,413)
Present value of lease liabilities	$	82,269	$	1,325	$	83,594

The weighted average lease terms and interest rates of leases held as of September 30, 2023 were as follows:


Lease Type	Weighted Average Term in Years	Weighted Average Interest Rate
Operating Leases	6.8	7.8%
Financing Leases	2.8	6.9%

The cash outflows of leasing activity for the nine months ended September 30, 2023 and 2022 were as follows (in thousands):


		Nine Months Ended September 30,
Cash Flow Source	Classification	2023		2022
Operating cash flows from operating leases	Operating activities	$	(9,083)	$	(3,330)
Operating cash flows from financing leases	Operating activities	(186)		37
Financing cash flows from financing leases	Financing activities	(358)		(457)

Refer to Note 4 – Revenue Recognition for a discussion on the Company's activities as lessor.

Leases

Note 7 – Leases

Activities as Lessee



		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Type	Classification	2023		2022		2023		2022
Operating Lease Expense (1)	Operating expenses	$	5,850	$	4,519	$	14,980	$	10,581
Financing Lease Amortization	Operating expenses	133		207		393		471
Financing Lease Interest	Interest expense	23		37		65		68
Financing Lease Expense		156		244		458		539
Net Lease Cost		$	6,006	$	4,763	$	15,438	$	11,120

(1) Includes short term lease expense, which is immaterial.

The value of net assets and liabilities related to our operating and finance leases as of September 30, 2023 and December 31, 2022 was as follows (in thousands):


Lease Type	September 30, 2023		December 31, 2022
Total ROU operating lease assets (1)	$	79,791	$	46,755
Total ROU financing lease assets (2)	1,514		1,519
Total lease assets	$	81,305	$	48,274

Total current operating lease liabilities	$	12,711	$	9,480
Total current financing lease liabilities	530		484
Total current lease liabilities	$	13,241	$	9,964

Total long term operating lease liabilities	$	69,558	$	38,898
Total long term financing lease liabilities	795		930
Total long term lease liabilities	$	70,353	$	39,828

(1)Operating lease assets are recorded net of accumulated amortization of $23.2 million as of September 30, 2023 and $14.8 million as of December 31, 2022.

The value of lease liabilities related to our operating and finance leases as of September 30, 2023 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total
Remaining 2023	$	5,030	$	165	$	5,195
2024	18,477		558		19,035
2025	18,179		364		18,543
2026	14,406		282		14,688
2027	12,326		95		12,421
Thereafter	40,120		5		40,125
Total lease payments	108,538		1,469		110,007
Less: Interest	(26,269)		(144)		(26,413)
Present value of lease liabilities	$	82,269	$	1,325	$	83,594

The weighted average lease terms and interest rates of leases held as of September 30, 2023 were as follows:


Lease Type	Weighted Average Term in Years	Weighted Average Interest Rate
Operating Leases	6.8	7.8%
Financing Leases	2.8	6.9%

The cash outflows of leasing activity for the nine months ended September 30, 2023 and 2022 were as follows (in thousands):


		Nine Months Ended September 30,
Cash Flow Source	Classification	2023		2022
Operating cash flows from operating leases	Operating activities	$	(9,083)	$	(3,330)
Operating cash flows from financing leases	Operating activities	(186)		37
Financing cash flows from financing leases	Financing activities	(358)		(457)

Refer to Note 4 – Revenue Recognition for a discussion on the Company's activities as lessor.

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill Activity Related to Acquisitions

Changes in the carrying amount of goodwill by segment were as follows:



(in thousands)	Lawson		TestEquity		Gexpro Services		All Other		Total
Balance at December 31, 2022	$	155,773	$	114,104	$	55,421	$	22,750	$	348,048
Acquisitions(1)	—		49,941		—		—		49,941
Impact of foreign exchange rates	(11)		—		(174)		(42)		(227)
Balance at September 30, 2023	$	155,762	$	164,045	$	55,247	$	22,708	$	397,762

(1)Refer to Note 3 – Business Acquisitions for information related to measurement period adjustments.

Gross Carrying Amount and Accumulated Amortization by Intangible Asset Class

The gross carrying amount and accumulated amortization for definite-lived intangible assets were as follows:



	September 30, 2023						December 31, 2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	117,780	$	(26,498)	$	91,282	$	92,286	$	(17,401)	$	74,885
Customer relationships	234,346		(64,276)		170,070		192,934		(44,481)		148,453
Other (1)	7,974		(4,007)		3,967		7,961		(3,305)		4,656
Total	$	360,100	$	(94,781)	$	265,319	$	293,181	$	(65,187)	$	227,994

(1) Other primarily consists of non-compete agreements.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The estimated aggregate amortization expense for the remaining year 2023 and each of the next five years are as follows:


(in thousands)	Amortization
Remaining 2023	$	8,952
2024	42,856
2025	39,191
2026	36,217
2027	31,409
2028	27,537
Thereafter	79,157
Total	$	265,319

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

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Earnings Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Jun. 30, 2023

Mar. 31, 2023

Sep. 30, 2022

Jun. 30, 2022

Mar. 31, 2022

Sep. 30, 2023

Sep. 30, 2022

Basic income per share:

Basic weighted average shares outstanding (in shares)

$ (1,568)

$ 3,024

$ 5,907

$ 16,541

$ (4,715)

$ (2,537)

$ 7,363

$ 9,289

46,737,443

38,879,992

44,216,541

34,287,628

Basic income (loss) per share of common stock (in USD per share)

^[1]

$ (0.03)

$ 0.43

$ 0.17

$ 0.27

Diluted income per share:

Basic weighted average shares outstanding (in shares)

$ (1,568)

$ 3,024

$ 5,907

$ 16,541

$ (4,715)

$ (2,537)

$ 7,363

$ 9,289

46,737,443

38,879,992

44,216,541

34,287,628

Effect of dilutive securities outstanding (in shares)

426,716

380,878

626,506

Diluted weighted average shares outstanding (in shares)

46,737,443

39,306,708

44,597,419

34,914,134

Diluted income (loss) per share of common stock (in USD per share)

^[1]

$ (0.03)

$ 0.42

$ 0.17

$ 0.27

Anti-dilutive securities excluded from the calculation of diluted income per share (in shares)

448,910

493,914

496,000

[1]	(1) The accompanying Unaudited Condensed Consolidated Financial Statements and notes thereto have been retroactively adjusted to reflect the two-for-one stock split completed in August 2023. See Note 1 – Nature of Operations and Basis of Presentation for details.

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Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement, Option, Activity

Activity related to the Company’s stock options during 2023 was as follows:


	Number of Stock Options	Weighted Average Exercise Price
Outstanding on December 31, 2022	576,000	$	38.80

Granted	1,353,706	37.05


Outstanding on September 30, 2023	1,929,706	37.50

Exercisable on September 30, 2023	180,800	29.74

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions

The weighted average fair value assumptions used in the Black-Scholes model for the stock options issued during 2023 were as follows:


Expected volatility			45.2% to 45.5%
Risk-free rate of return			3.6% to 4.5%
Expected term (in years)			6.2 years to 6.5 years
Expected annual dividend			$0

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Oct. 23, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	0-10546
Entity Registrant Name	DISTRIBUTION SOLUTIONS GROUP, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-2229304
Entity Address, Address Line One	301 Commerce Street
Entity Address, Address Line Two	Suite 1700
Entity Address, City or Town	Fort Worth,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	76102
City Area Code	(888)
Local Phone Number	611-9888
Title of 12(b) Security	Common stock, $1.00 par value
Trading Symbol	DSGR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		46,845,970
Entity Central Index Key	0000703604
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 14 – Commitments and Contingencies Merger Litigation In February 2022, three purported DSG stockholders made demands pursuant to Section 220 of the Delaware General Corporation Law to inspect certain books and records of DSG (collectively, the “Books and Records Demands”). One stated purpose of the Books and Records Demands was to investigate questions of director disinterestedness and independence and the alleged possibility of wrongdoing, mismanagement and/or material non-disclosure related to the Special Committee’s and the DSG Board of Directors’ approval of the Mergers. On March 16, 2022, one of the purported DSG stockholders who previously made a Books and Records Demand filed a lawsuit entitled Robert Garfield v. Lawson Products, Inc., Case No. 2022-0252, in the Court of Chancery of the State of Delaware against DSG (the “Garfield Action”). On March 22, 2022, another of the purported DSG stockholders who previously made a Books and Records Demand filed a lawsuit entitled Jeffrey Edelman v. Lawson Products, Inc., Case No. 2022-0270, in the Court of Chancery of the State of Delaware against DSG (the “Edelman Action”). The Garfield Action and the Edelman Action, which were consolidated and re-captioned as Lawson Products, Inc. Section 220 Litigation, Case No. 2022-0270, are collectively referred to as the “Books and Records Actions.” The Books and Records Actions sought to compel inspection of certain books and records of DSG to investigate questions of director disinterestedness and independence and the alleged possibility of wrongdoing, mismanagement and/or material non-disclosure related to the Special Committee’s and the DSG Board of Directors’ approval of the Mergers. Following briefing, the Delaware Court of Chancery held a trial on July 14, 2022 to adjudicate the Books and Records Actions. At the conclusion of the trial, the Court ruled orally that the stockholders’ demands would be granted only in one respect (production of documents sufficient to show the identities of any guarantors of debt of the acquired companies) and the Court denied the remainder of the stockholders’ requests. The Court’s ruling was memorialized in an order issued on July 20, 2022. Thereafter, DSG produced excerpts of certain documents as required by the Court's ruling and subsequent order. On October 3, 2022, the plaintiffs in the Books and Records Actions filed a shareholder derivative action (the “Derivative Action”) entitled Jeffrey Edelman and Robert Garfield v. John Bryan King et al., Case No. 2022-0886, in the Court of Chancery of the State of Delaware (the "Delaware Chancery Court"). The Derivative Action names as defendants J. Bryan King, Lee S. Hillman, Bianca A. Rhodes, Mark F. Moon, Andrew B. Albert, I. Steven Edelson and Ronald J. Knutson (collectively, “Director and Officer Defendants”), and LKCM Headwater Investments II, L.P., LKCM Headwater II Sidecar Partnership, L.P., Headwater Lawson Investors, LLC, PDLP Lawson, LLC, LKCM Investment Partnership, L.P., LKCM Micro-Cap Partnership, L.P., LKCM Core Discipline, L.P. and Luther King Capital Management Corporation (collectively, the “LKCM Defendants”). Purporting to act on behalf of DSG, in the Derivative Action the plaintiffs allege, among other things, various claims of alleged breach of fiduciary duty against the Director and Officer Defendants and the LKCM Defendants in connection with the Mergers. The Derivative Action seeks, among other things, money damages, equitable relief and the costs of the Derivative Action, including reasonable attorneys’, accountants’ and experts’ fees. On October 24, 2022, the plaintiffs voluntarily dismissed PDLP Lawson, LLC and LKCM Investment Partnership, L.P. from the Derivative Action without prejudice. The Delaware Chancery Court held a hearing on September 13, 2023, to hear arguments on the defendants’ motions to dismiss. At the conclusion of the hearing, in rulings issued on September 13, 2023, and September 19, 2023, the entire complaint was dismissed with prejudice for failure to state a claim. On October 16, 2023, the plaintiffs filed a notice of appeal from the dismissal of their claims with respect to all defendants other than the members of the Special Committee (Messrs. Hillman, Albert and Edelson) and Mr. Moon. The Delaware Supreme Court has not set a date for the hearing on the plaintiffs’ appeal of the ruling. DSG disagrees with and intends to vigorously defend against the Derivative Action. The Derivative Action could result in additional costs to DSG, including costs associated with the indemnification of directors and officers. At this time, DSG is unable to predict the ultimate outcome of the Derivative Action or, if the outcome is adverse, to reasonably estimate an amount or range of reasonably possible loss, if any, associated with the Derivative Action. Accordingly, no amounts have been recorded in the unaudited condensed consolidated financial statements for these matters. No assurance can be given that additional lawsuits will not be filed against DSG and/or its directors and officers and/or other persons or entities in connection with the Mergers. Cyber Incident Litigation On February 10, 2022, DSG disclosed that its computer network was the subject of a cyber incident potentially involving unauthorized access to certain confidential information (the “Cyber Incident”). On April 4, 2023, a putative class action lawsuit (the “Cyber Incident Suit”) was filed against DSG entitled Lardone Davis, on behalf of himself and all others similarly situated, v. Lawson Products, Inc., Case No. 1:23-cv-02118, in the United States District Court for the Northern District of Illinois, Eastern Division. The plaintiff in this case, who purports to represent the class of individuals harmed by alleged actions and/or omissions by DSG in connection with the Cyber Incident, asserts a variety of common law and statutory claims seeking monetary damages, injunctive relief and other related relief related to the potential unauthorized access by third parties to personal identifiable information and protected health information. DSG disagrees with and intends to vigorously defend against the Cyber Incident Suit. The Cyber Incident Suit could result in additional costs and losses to DSG, although, at this time, DSG is unable to reasonably estimate the amount or range of reasonably possible loss, if any, that might result from adverse judgments, settlements, fines, penalties or other resolution of these proceedings based on the early stage of this proceeding, the absence of specific allegations as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and the lack of resolution of significant factual and legal issues. Accordingly, no amounts have been recorded in the unaudited condensed consolidated financial statements for the Cyber Incident Suit. No assurance can be given that additional lawsuits will not be filed against DSG and/or its directors and officers and/or other persons or entities in connection with the Cyber Incident. Environmental Matter In 2012, it was determined that a Company owned site in Decatur, Alabama, contained hazardous substances in the soil and groundwater as a result of historical operations prior to the Company's ownership. The Company retained an environmental consulting firm to further investigate the contamination, prepare a remediation plan, and enroll the site in the Alabama Department of Environmental Management (“ADEM”) voluntary cleanup program. A remediation plan was approved by ADEM in 2018. The plan consists of chemical injections throughout the affected area, as well as subsequent monitoring of the area. The injection process was completed in the first quarter of 2019 and the environmental consulting firm is monitoring the affected area. At September 30, 2023 the Company had approximately $0.1 million accrued for potential monitoring costs included in Accrued expenses and other current liabilities in the Unaudited Condensed Consolidated Balance Sheet. The costs for future monitoring are not significant and have been fully accrued. The Company does not expect to capitalize any amounts related to the remediation plan. Purchase commitments The Company enters into inventory purchase commitments with third parties in the ordinary course of business, and as of September 30, 2023, had contractual commitments to purchase approximately $200 million of products from our suppliers and contractors, which is expected to be paid in the next twelve months.

Business Acquisitions - Narrative (Details)						3 Months Ended		4 Months Ended	9 Months Ended
Business Acquisitions - Narrative (Details)	Jun. 08, 2023 USD ($)	Mar. 30, 2023 location	Mar. 20, 2023 shares	Apr. 01, 2022 USD ($) shares	Mar. 31, 2022 USD ($) $ / shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($) segment shares	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Business Acquisition [Line Items]
Principal operating segment \| segment									3
Expected tax deductible goodwill amount											$ 53,600,000
Proceeds from employees for share purchases									$ 3,253,000	$ 0
Lawson
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares				18,240,334
Expected tax deductible goodwill amount											$ 0
Total consideration exchanged				$ 353,401,000
DSG common stock closing price on March 31, 2022 (in USD per share) \| $ / shares					$ 19.27
Hisco
Business Acquisition [Line Items]
Expected tax deductible goodwill amount						$ 42,900,000		$ 42,900,000	$ 42,900,000
Number of locations \| location		38
Total consideration exchanged								268,500,000
Cash acquired from acquisition								12,200,000
Cash exchanged for equity related to retention bonuses	$ 37,500,000
Stock issued (in shares) \| shares						144,608			144,608
Compensation expense						$ 400,000			$ 400,000
Common stock, value, subscription price	22.50
Maximum stock employees can purchase	$ 25,000,000
Decrease in goodwill						700,000		700,000	700,000
Total purchase consideration exchanged, net of cash acquired						2,000,000		$ 2,000,000	2,000,000
Proceeds from employees for share purchases						$ 3,250,000			$ 3,250,000
Hisco \| Trade names
Business Acquisition [Line Items]
Useful life (in years)						8 years		8 years	8 years
Hisco \| Customer relationships
Business Acquisition [Line Items]
Useful life (in years)						12 years		12 years	12 years
Hisco \| Selling, General and Administrative Expenses
Business Acquisition [Line Items]
Compensation expense						$ 10,100,000			$ 12,400,000
Frontier
Business Acquisition [Line Items]
Total consideration exchanged					$ 25,674,000
Potential earn-out payment					$ 3,000,000
Other Acquisitions
Business Acquisition [Line Items]
Merger transaction costs						$ (100,000)	$ 2,400,000		$ 9,100,000	$ 10,800,000
TestEquity And Gexpro Services Former Owners \| Lawson
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares				20,600,000
TestEquity And Gexpro \| Lawson \| Earnout Shares
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares			3,400,000

Stock-Based Compensation - Summary of Stock Options Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Number of Stock Options
Outstanding at beginning of period, (in shares) \| shares	576,000
Granted (in shares) \| shares	1,353,706
Outstanding at end of period, (in shares) \| shares	1,929,706
Exercisable at end of period, (in shares) \| shares	180,800
Weighted Average Exercise Price
Outstanding at beginning of period, (in USD per share) \| $ / shares	$ 38.80
Granted (in USD per share) \| $ / shares	37.05
Outstanding at end of period, (in USD per share) \| $ / shares	37.50
Exercisable (in USD per share) \| $ / shares	$ 29.74

Earnout Liabilities

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Earnout Liabilities

Note 3 – Business Acquisitions

Combination with TestEquity and Gexpro Services

Allocation of Consideration Exchanged

Under the acquisition method of accounting, the estimated consideration exchanged was calculated as follows:



(in thousands, except share data)	April 1, 2022
Number of DSG common shares	18,240,334
DSG common stock closing price per share on March 31, 2022	$	19.27
Fair value of shares exchanged	$	351,491

Other consideration(1)	1,910

Total consideration exchanged	$	353,401

(1)Fair value adjustment of stock-based compensation awards.


(in thousands)	Final Purchase Price Allocation
Current assets	$	148,308
Property, plant and equipment	57,414
Right of use assets	18,258
Other intangible assets	119,060
Deferred tax liability, net of deferred tax asset	(19,394)
Other assets	18,373
Current liabilities	(71,165)
Long-term obligations	(25,746)
Lease and financing obligations	(28,827)
Derivative earnout liability	(43,900)

Goodwill	181,020
Total consideration exchanged	$	353,401

The allocation of consideration exchanged to other intangible assets acquired was as follows:


(in thousands)	Fair Value		Estimated Life (in years)
Customer relationships	$	76,050	19
Trade names	43,010		8
Total other intangible assets	$	119,060

Other Acquisitions

Purchase of HIS Company, Inc.


	Hisco
(in thousands)	June 8, 2023 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Current assets	$	131,950	$	(2,565)	$	129,385
Property, plant and equipment	48,326		—		48,326
Right of use assets	21,102		1,188		22,290
Other intangible assets:
Customer relationships	41,800		(200)		41,600
Trade names	25,600		—		25,600

Deferred tax liability, net of deferred tax asset	(2,544)		40		(2,504)
Other assets	2,495		—		2,495
Accounts payable	(16,689)		—		(16,689)
Lease liabilities	(22,372)		293		(22,079)
Accrued expenses and other liabilities	(8,961)		—		(8,961)

Goodwill	49,718		(713)		49,005
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(1,957)	$	268,468
Cash consideration	$	252,007	$	—	$	252,007
Deferred consideration	12,418		3,943		16,361
Contingent consideration	6,000		(5,900)		100
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(1,957)	$	268,468

Purchases of Other Companies in 2022


(in thousands)	Interworld Highway, LLC		Resolux		Frontier		National Test Equipment		Instrumex
Acquisition date	April 29, 2022		January 3, 2022		March 31, 2022		June 1, 2022		December 1, 2022		Total
Current assets	$	15,018	$	10,210	$	2,881	$	2,187	$	3,495	$	33,791
Property, plant and equipment	313		459		1,189		642		30		2,633
Right of use assets	—		1,125		9,313		—		—		10,438
Other intangible assets:
Customer relationships	6,369		11,400		9,300		2,100		800		29,969
Trade names	4,600		6,100		3,000		—		—		13,700

Other assets	10		86		—		—		14		110
Accounts payable	(8,856)		(3,058)		(778)		(196)		(1,305)		(14,193)
Current portion of long-term debt	—		—		—		(2,073)		—		(2,073)
Accrued expenses and other liabilities	—		(4,747)		(1,462)		(1,171)		(626)		(8,006)
Lease liabilities	—		(1,125)		(9,313)		—		—		(10,438)
Long-term debt	—		—		—		—		(2,105)		(2,105)
Goodwill	37,236		10,305		11,544		5,703		1,989		66,777
Total purchase consideration exchanged, net of cash acquired	$	54,690	$	30,755	$	25,674	$	7,192	$	2,292	$	120,603
Cash consideration	$	54,690	$	30,755	$	25,674	$	6,023	$	1,818	$	118,960
Seller's notes	—		—		—		1,169		—		1,169
Deferred consideration	—		—		—		—		474		474
Total purchase consideration exchanged, net of cash acquired	$	54,690	$	30,755	$	25,674	$	7,192	$	2,292	$	120,603

As a result of acquisitions completed in 2022, the Company recorded tax deductible goodwill of $53.6 million in 2022 that may result in a tax benefit in future periods.

Unaudited Pro Forma Information


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Revenue	$	438,909	$	457,958	$	1,347,226	$	1,320,226


Net income	$	(1,568)	$	13,056	$	8,175	$	12,147

Actual Results of Business Acquisitions


	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
(in thousands)	Lawson		Other Acquisitions		Total		Lawson		Other Acquisitions		Total
Revenue	$	—	$	104,796	$	104,796	$	126,693	$	71,216	$	197,909
Net Income	$	—	$	(7,388)	$	(7,388)	$	8,282	$	4,363	$	12,645

	Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022
(in thousands)	Lawson		Other Acquisitions		Total		Lawson		Other Acquisitions		Total
Revenue	$	—	$	132,797	$	132,797	$	250,364	$	146,742	$	397,106
Net Income	$	—	$	(8,253)	$	(8,253)	$	12,883	$	12,651	$	25,534

Note 8 – Earnout Liabilities

Combination with TestEquity and Gexpro Services

Hisco Acquisition

Frontier Acquisition

Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Total debt	$ 589,585	$ 417,102
Current portion of long-term debt	(32,335)	(16,352)
Total long-term debt	550,526	395,825
Line of Credit
Line of Credit Facility [Line Items]
Less deferred financing costs	(9,200)
Line of Credit \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Less deferred financing costs	(6,724)	(4,925)
Line of Credit \| Revolving Credit Facility \| Senior Secured Revolving Credit Facility
Line of Credit Facility [Line Items]
Total debt	0	122,000
Line of Credit \| Revolving Credit Facility \| Other revolving line of credit
Line of Credit Facility [Line Items]
Total debt	2,085	1,352
Line of Credit \| Secured Debt
Line of Credit Facility [Line Items]
Total debt	48,125	50,000
Less deferred financing costs	(6,700)
Line of Credit \| Secured Debt \| Senior Secured Term Loan
Line of Credit Facility [Line Items]
Total debt	234,375	243,750
Line of Credit \| Incremental term loan
Line of Credit Facility [Line Items]
Total debt	$ 305,000	$ 0

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense	$ 990	$ 8,480	$ 3,637	$ 3,912
Effective income tax rate	(171.30%)	33.90%	33.10%	29.60%

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Stock-Based Compensation

Note 10 – Stock-Based Compensation

The Company recorded stock-based compensation expense of $1.0 million and $5.4 million for the three and nine months ended September 30, 2023, respectively, and a benefit of $3.6 million and expense of $0.4 million for the three and nine months ended September 30, 2022, respectively. A portion of the Company's stock-based awards are liability-classified. Accordingly, changes in the market value of DSG common stock may result in stock-based compensation expense or benefit in certain periods. A stock-based compensation liability of $5.1 million as of September 30, 2023 and $3.3 million as of December 31, 2022 was included in Accrued expenses and other current liabilities in the Unaudited Condensed Consolidated Balance Sheet.

Impact of Stock Split

The equity compensation plans contain anti-dilution provisions whereby in the event of any change in the capitalization of the Company (including in the event of a stock split), the number and type of awards underlying outstanding stock-based compensation awards must be adjusted, as appropriate, in order to prevent dilution or enhancement of rights. The impact of these provisions resulted in a modification of all outstanding stock-based compensation awards upon the Stock Split. As the fair value of the awards immediately after the Stock Split did not change when compared to the fair value of such awards immediately prior to the Stock Split, no incremental compensation costs were recognized as a result of such modifications. In addition, there was no change to the vesting conditions or classification of each of the outstanding stock-based compensation awards.

Restricted Stock Awards

For the nine months ended September 30, 2023, the Company issued approximately 53,000 Restricted stock awards ("RSAs") that vest over five years from the grant date with a grant date fair value of $1.2 million. Upon vesting, the vested RSAs are exchanged for an equal number of shares of DSG common stock. The participants have no voting or dividend rights with the RSAs. The RSAs are valued at the closing price of shares of DSG common stock on the date of grant and the expense is recorded ratably over the vesting period.

Stock Options

For the nine months ended September 30, 2023, the Company issued approximately 1,354,000 stock options to key employees that vest over five years from the grant date. The fair value was determined using a Black-Scholes valuation model with a grant date fair value of $9.6 million. Each stock option can be exchanged for one share of DSG common stock at the stated exercise price. Upon vesting, stock options are recognized as a component of equity. Unrecognized compensation related

to stock options as of September 30, 2023 was $10.0 million, which is expected to be recognized over a weighted-average period of 2.3 years.

Activity related to the Company’s stock options during 2023 was as follows:


	Number of Stock Options	Weighted Average Exercise Price
Outstanding on December 31, 2022	576,000	$	38.80

Granted	1,353,706	37.05


Outstanding on September 30, 2023	1,929,706	37.50

Exercisable on September 30, 2023	180,800	29.74

The weighted average fair value assumptions used in the Black-Scholes model for the stock options issued during 2023 were as follows:


Expected volatility			45.2% to 45.5%
Risk-free rate of return			3.6% to 4.5%
Expected term (in years)			6.2 years to 6.5 years
Expected annual dividend			$0

The expected volatility was based on the historic volatility of the Company's stock price commensurate with the expected life of the stock options. The risk-free rate of return reflects the interest rate offered for zero coupon treasury bonds over the expected life of the stock options. The expected life represents the period of time that options granted are expected to be outstanding and was calculated using the simplified method allowed by the SEC, which approximates our historical experience. The estimated annual dividend was based on the recent dividend payout trend.

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Net Lease Cost

The expenses generated by leasing activity for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):



		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Type	Classification	2023		2022		2023		2022
Operating Lease Expense (1)	Operating expenses	$	5,850	$	4,519	$	14,980	$	10,581
Financing Lease Amortization	Operating expenses	133		207		393		471
Financing Lease Interest	Interest expense	23		37		65		68
Financing Lease Expense		156		244		458		539
Net Lease Cost		$	6,006	$	4,763	$	15,438	$	11,120

(1) Includes short term lease expense, which is immaterial.

The weighted average lease terms and interest rates of leases held as of September 30, 2023 were as follows:


Lease Type	Weighted Average Term in Years	Weighted Average Interest Rate
Operating Leases	6.8	7.8%
Financing Leases	2.8	6.9%

The cash outflows of leasing activity for the nine months ended September 30, 2023 and 2022 were as follows (in thousands):


		Nine Months Ended September 30,
Cash Flow Source	Classification	2023		2022
Operating cash flows from operating leases	Operating activities	$	(9,083)	$	(3,330)
Operating cash flows from financing leases	Operating activities	(186)		37
Financing cash flows from financing leases	Financing activities	(358)		(457)

Operating Lease Assets and Liabilities

The value of net assets and liabilities related to our operating and finance leases as of September 30, 2023 and December 31, 2022 was as follows (in thousands):


Lease Type	September 30, 2023		December 31, 2022
Total ROU operating lease assets (1)	$	79,791	$	46,755
Total ROU financing lease assets (2)	1,514		1,519
Total lease assets	$	81,305	$	48,274

Total current operating lease liabilities	$	12,711	$	9,480
Total current financing lease liabilities	530		484
Total current lease liabilities	$	13,241	$	9,964

Total long term operating lease liabilities	$	69,558	$	38,898
Total long term financing lease liabilities	795		930
Total long term lease liabilities	$	70,353	$	39,828

(1)Operating lease assets are recorded net of accumulated amortization of $23.2 million as of September 30, 2023 and $14.8 million as of December 31, 2022.

Value of Operating Lease Liabilities Generated by Leasing Activities

The value of lease liabilities related to our operating and finance leases as of September 30, 2023 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total
Remaining 2023	$	5,030	$	165	$	5,195
2024	18,477		558		19,035
2025	18,179		364		18,543
2026	14,406		282		14,688
2027	12,326		95		12,421
Thereafter	40,120		5		40,125
Total lease payments	108,538		1,469		110,007
Less: Interest	(26,269)		(144)		(26,413)
Present value of lease liabilities	$	82,269	$	1,325	$	83,594

Value of Finance Lease Liabilities Generated by Leasing Activities

The value of lease liabilities related to our operating and finance leases as of September 30, 2023 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total
Remaining 2023	$	5,030	$	165	$	5,195
2024	18,477		558		19,035
2025	18,179		364		18,543
2026	14,406		282		14,688
2027	12,326		95		12,421
Thereafter	40,120		5		40,125
Total lease payments	108,538		1,469		110,007
Less: Interest	(26,269)		(144)		(26,413)
Present value of lease liabilities	$	82,269	$	1,325	$	83,594

Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

Note 16 – Segment Information

Based on operational, reporting and management structures, the Company has identified three reportable segments based on the nature of the products and services and type of customer for those products and services. A description of our reportable segments is as follows:

Lawson is a distributor of specialty products and services to the industrial, commercial, institutional and government maintenance, repair and operations market.

TestEquity is a distributor of test and measurement equipment and solutions, industrial and electronic production supplies, vendor managed inventory programs, converting, fabrication and adhesive solutions from its leading manufacturer partners supporting the technology, aerospace, defense, automotive, electronics, education, automotive and medical industries.

Gexpro Services is a global supply chain solutions provider, specializing in developing and implementing vendor managed inventory and kitting programs to high-specification manufacturing customers.

The Company also has an “All Other” category which includes unallocated DSG holding company costs that are not directly attributable to the ongoing operating activities of our reportable segments and includes the results of the Bolt Supply House ("Bolt") non-reportable segment. Revenue within the All Other category represents the results of Bolt. Bolt generates revenue primarily from the sale of MRO products to its walk-up customers and service to its customers through its 14 branch locations. Bolt does not provide VMI services for its customers or provide services in addition to product sales to customers. Revenue is recognized at the time that control of the product has been transferred to the customer which is either upon delivery or shipment depending on the terms of the contract.

Financial information for the Company's reportable segments is presented below. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Revenue
Lawson(1)	$	114,477	$	109,418	$	358,903	$	216,752
TestEquity	207,657		116,709		451,082		286,984
Gexpro Services	103,232		103,749		312,523		285,224
All Other(2)	13,543		17,275		42,655		33,612
Total revenue	$	438,909	$	347,151	$	1,165,163	$	822,572

Operating income (loss)
Lawson(1)	$	10,643	$	5,352	$	27,358	$	2,792
TestEquity	(5,027)		7,576		(8,183)		7,443
Gexpro Services	7,332		7,992		23,484		16,972
All Other(2)	(165)		1,107		621		1,921
Total operating income (loss)	$	12,783	$	22,027	$	43,280	$	29,128

(1)Includes the operating results of Lawson only subsequent to the Merger Date of April 1, 2022 and not Lawson operating results prior to the Mergers.

(2) Includes the operating results of All Other only subsequent to the Merger Date of April 1, 2022 and not All Other operating results prior to the Mergers.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 32
-Subparagraph (f)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Goodwill and Intangible Assets Disclosure [Abstract]

Subsequent Event	9 Months Ended
Subsequent Event	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Event	Note 17 – Subsequent Event [OPEN]

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets

Note 6 – Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by segment were as follows:



(in thousands)	Lawson		TestEquity		Gexpro Services		All Other		Total
Balance at December 31, 2022	$	155,773	$	114,104	$	55,421	$	22,750	$	348,048
Acquisitions(1)	—		49,941		—		—		49,941
Impact of foreign exchange rates	(11)		—		(174)		(42)		(227)
Balance at September 30, 2023	$	155,762	$	164,045	$	55,247	$	22,708	$	397,762

(1)Refer to Note 3 – Business Acquisitions for information related to measurement period adjustments.

Intangible Assets

The gross carrying amount and accumulated amortization for definite-lived intangible assets were as follows:



	September 30, 2023						December 31, 2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	117,780	$	(26,498)	$	91,282	$	92,286	$	(17,401)	$	74,885
Customer relationships	234,346		(64,276)		170,070		192,934		(44,481)		148,453
Other (1)	7,974		(4,007)		3,967		7,961		(3,305)		4,656
Total	$	360,100	$	(94,781)	$	265,319	$	293,181	$	(65,187)	$	227,994

(1) Other primarily consists of non-compete agreements.

Amortization expense for definite-lived intangible assets was $11.3 million and $29.9 million for the three and nine months ended September 30, 2023, respectively, and $5.6 million and $20.9 million for the three and nine months ended September 30, 2022, respectively. Amortization expense related to intangible assets was recorded in Selling, general and administrative expenses.

The estimated aggregate amortization expense for the remaining year 2023 and each of the next five years are as follows:


(in thousands)	Amortization
Remaining 2023	$	8,952
2024	42,856
2025	39,191
2026	36,217
2027	31,409
2028	27,537
Thereafter	79,157
Total	$	265,319

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities
Net income (loss)	$ 7,363	$ 9,289
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization	47,316	31,314
Amortization of debt issue costs	1,662	1,419
Extinguishment of debt	0	3,395
Stock-based compensation	5,441	445
Compensation expense related to employee share purchases	427	0
Change in fair value of earnout liabilities	(646)	(3,948)
Gain on sale of rental equipment	(1,929)	(2,463)
Gain on sale of property, plant and equipment	(86)	0
Charge for step-up of acquired inventory	2,866	2,703
Net realizable value and reserve adjustment for obsolete and excess inventory	0	5,551
Bad debt expense	1,045	564
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(8,329)	(30,795)
Inventories	9,639	(43,857)
Prepaid expenses and other current assets	(7,288)	(2,224)
Accounts payable	10,552	1,687
Accrued expenses and other current liabilities	5,587	1,316
Other changes in operating assets and liabilities	433	6,324
Net cash provided by (used in) operating activities	74,053	(19,280)
Investing activities
Purchases of property, plant and equipment	(11,180)	(4,954)
Business acquisitions, net of cash acquired	(252,007)	(113,681)
Purchases of rental equipment	(7,735)	(7,913)
Proceeds from sale of rental equipment	4,202	5,998
Net cash provided by (used in) investing activities	(266,720)	(120,550)
Financing activities
Proceeds from revolving lines of credit	174,587	302,044
Payments on revolving lines of credit	(295,816)	(237,370)
Proceeds from term loans	305,000	445,630
Payments on term loans	(11,250)	(343,662)
Deferred financing costs	(3,419)	(11,956)
Proceeds from rights offering, net of offering costs of $1,531	98,469	0
Repurchase of common stock	0	(1,940)
Shares repurchased held in treasury	(171)	(469)
Proceeds from employees for share purchases	3,253	0
Payment of financing lease principal	(358)	(457)
Payment of earnout	(1,000)	0
Net cash provided by (used in) financing activities	269,295	151,820
Effect of exchange rate changes on cash and cash equivalents	(209)	(1,309)
Increase (decrease) in cash, cash equivalents and restricted cash	76,419	10,681
Cash, cash equivalents and restricted cash at beginning of period	24,740	14,671
Cash, cash equivalents and restricted cash at end of period	101,159	25,352
Cash and cash equivalents	80,456	25,171
Restricted cash	20,703	181
Total cash, cash equivalents and restricted cash	101,159	25,352
Supplemental disclosure of cash flow information
Net cash paid for income taxes	9,370	11,553
Net cash paid for interest	26,187	12,093
Net cash paid for interest on supply chain financing	1,753	579
Fair value of common stock exchanged for reverse acquisition	0	351,491
Settlement of related party obligations	0	5,276
Additions of property, plant and equipment included in accounts payable	521	73
Right of use assets obtained in exchange for finance lease liabilities	396	886
Right of use assets obtained in exchange for operating lease liabilities	$ 19,879	$ 12,773

Supplemental Financial Statement Information - Other Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Condensed Financial Information Disclosure [Abstract]
Security bonus plan	$ 9,109	$ 9,651
Deferred compensation	10,854	9,962
Other	4,658	4,036
Total other liabilities	$ 24,621	$ 23,649

Revenue Recognition - Narrative (Details) $ in Thousands	9 Months Ended
Revenue Recognition - Narrative (Details) $ in Thousands	Sep. 30, 2023 USD ($) revenueStream	Dec. 31, 2022 USD ($)
Disaggregation of Revenue [Line Items]
Deferred revenue	$ 1,136	$ 2,313
Parts Washer Leasing Program
Disaggregation of Revenue [Line Items]
Deferred revenue	0	0
Rental Equipment
Disaggregation of Revenue [Line Items]
Deferred revenue	$ 0	$ 0
Lawson
Disaggregation of Revenue [Line Items]
Number of revenue streams \| revenueStream	2
TestEquity
Disaggregation of Revenue [Line Items]
Payment terms (in days)	30 days
Gexpro Services \| Minimum
Disaggregation of Revenue [Line Items]
Payment terms (in days)	10 days
Gexpro Services \| Maximum
Disaggregation of Revenue [Line Items]
Payment terms (in days)	120 days

Business Acquisitions - Schedule of Acquired Assets and Liabilities (Details) - USD ($) $ in Thousands								4 Months Ended	12 Months Ended
	Jun. 08, 2023	Dec. 01, 2022	Jun. 01, 2022	Apr. 29, 2022	Apr. 01, 2022	Mar. 31, 2022	Jan. 03, 2022	Sep. 30, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill								$ 397,762	$ 348,048
Lawson
Business Acquisition [Line Items]
Lease and financing obligations					$ (28,827)
Total consideration exchanged					353,401
Lawson \| TestEquity And Gexpro
Business Acquisition [Line Items]
Current assets					148,308
Property, plant and equipment					57,414
Right of use assets					18,258
Other intangible assets					119,060
Deferred tax liability, net of deferred tax asset					(19,394)
Other assets					18,373
Current liabilities					(71,165)
Long-term obligations					(25,746)
Derivative earnout liability					(43,900)
Goodwill					181,020
Total consideration exchanged					$ 353,401
Hisco
Business Acquisition [Line Items]
Current assets	$ 131,950							129,385
Property, plant and equipment	48,326							48,326
Right of use assets	21,102							22,290
Deferred tax liability, net of deferred tax asset	(2,544)							(2,504)
Other assets	2,495							2,495
Accounts payable	(16,689)							(16,689)
Accrued expenses and other liabilities	(8,961)							(8,961)
Lease and financing obligations	(22,372)							(22,079)
Goodwill	49,718							49,005
Total consideration exchanged	270,425							268,468
Cash consideration	252,007							252,007
Deferred consideration	12,418							16,361
Total consideration exchanged								268,500
Contingent consideration	6,000							100
Measurement Period Adjustments
Current assets								(2,565)
Right of use assets								1,188
Deferred tax liability, net of deferred tax asset								40
Lease and financing obligations								293
Goodwill								(713)
Total purchase consideration exchanged, net of cash acquired								(1,957)
Deferred consideration								3,943
Contingent consideration								(5,900)
Hisco \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets	41,800							41,600
Measurement Period Adjustments
Customer relationships								(200)
Hisco \| Trade names
Business Acquisition [Line Items]
Other intangible assets	$ 25,600							25,600
2022 Acquisitions
Business Acquisition [Line Items]
Current assets									33,791
Property, plant and equipment									2,633
Right of use assets									10,438
Other assets									110
Accounts payable									(14,193)
Current portion of long-term debt									(2,073)
Accrued expenses and other liabilities									(8,006)
Lease and financing obligations									(10,438)
Long-term debt								(2,105)
Goodwill									66,777
Total consideration exchanged									120,603
Cash consideration									118,960
Deferred consideration									474
Total consideration exchanged									120,603
Seller's notes									1,169
2022 Acquisitions \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets									29,969
2022 Acquisitions \| Trade names
Business Acquisition [Line Items]
Other intangible assets									$ 13,700
Interworld Highway, LLC
Business Acquisition [Line Items]
Current assets				$ 15,018
Property, plant and equipment				313
Right of use assets				0
Other assets				10
Accounts payable				(8,856)
Current portion of long-term debt				0
Accrued expenses and other liabilities				0
Lease and financing obligations				0
Long-term debt				0
Goodwill				37,236
Total consideration exchanged				54,690
Cash consideration				54,690
Deferred consideration				0
Total consideration exchanged				54,690
Seller's notes				0
Interworld Highway, LLC \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets				6,369
Interworld Highway, LLC \| Trade names
Business Acquisition [Line Items]
Other intangible assets				$ 4,600
Resolux
Business Acquisition [Line Items]
Current assets							$ 10,210
Property, plant and equipment							459
Right of use assets							1,125
Other assets							86
Accounts payable							(3,058)
Current portion of long-term debt							0
Accrued expenses and other liabilities							(4,747)
Lease and financing obligations							(1,125)
Long-term debt							0
Goodwill							10,305
Total consideration exchanged							30,755
Cash consideration							30,755
Deferred consideration							0
Total consideration exchanged							30,755
Seller's notes							0
Resolux \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets							11,400
Resolux \| Trade names
Business Acquisition [Line Items]
Other intangible assets							$ 6,100
Frontier
Business Acquisition [Line Items]
Current assets						$ 2,881
Property, plant and equipment						1,189
Right of use assets						9,313
Other assets						0
Accounts payable						(778)
Current portion of long-term debt						0
Accrued expenses and other liabilities						(1,462)
Lease and financing obligations						(9,313)
Long-term debt						0
Goodwill						11,544
Total consideration exchanged						25,674
Cash consideration						25,674
Deferred consideration						0
Total consideration exchanged						25,674
Seller's notes						0
Frontier \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets						9,300
Frontier \| Trade names
Business Acquisition [Line Items]
Other intangible assets						$ 3,000
National Test Equipment
Business Acquisition [Line Items]
Current assets			$ 2,187
Property, plant and equipment			642
Right of use assets			0
Other assets			0
Accounts payable			(196)
Current portion of long-term debt			(2,073)
Accrued expenses and other liabilities			(1,171)
Lease and financing obligations			0
Long-term debt			0
Goodwill			5,703
Total consideration exchanged			7,192
Cash consideration			6,023
Deferred consideration			0
Total consideration exchanged			7,192
Seller's notes			1,169
National Test Equipment \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets			2,100
National Test Equipment \| Trade names
Business Acquisition [Line Items]
Other intangible assets			$ 0
Instrumex
Business Acquisition [Line Items]
Current assets		$ 3,495
Property, plant and equipment		30
Right of use assets		0
Other assets		14
Accounts payable		(1,305)
Current portion of long-term debt		0
Accrued expenses and other liabilities		(626)
Lease and financing obligations		0
Long-term debt		(2,105)
Goodwill		1,989						900
Total consideration exchanged		2,292						$ 1,600
Cash consideration		1,818
Deferred consideration		474
Total consideration exchanged		2,292
Seller's notes		0
Instrumex \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets		800
Instrumex \| Trade names
Business Acquisition [Line Items]
Other intangible assets		$ 0

Supplemental Financial Statement Information - Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total	$ 140,351		$ 140,351		$ 82,813
Accumulated depreciation and amortization	(28,402)		(28,402)		(18,418)
Property, plant and equipment, net	111,949		111,949		64,395
Land
Property, Plant and Equipment [Line Items]
Total	16,753		16,753		9,578
Buildings and improvements
Property, Plant and Equipment [Line Items]
Total	50,009		50,009		27,199
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total	48,235		48,235		26,948
Capitalized software
Property, Plant and Equipment [Line Items]
Total	9,140		9,140		7,889
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total	10,707		10,707		6,346
Vehicles
Property, Plant and Equipment [Line Items]
Total	1,703		1,703		1,713
Construction in progress(1)
Property, Plant and Equipment [Line Items]
Total	3,804		3,804		$ 3,140
Property, Plant and Equipment, Excluding Rental Equipment
Property, Plant and Equipment [Line Items]
Depreciation	3,500	$ 1,100	9,500	$ 4,000
Amortization	$ 500	$ (0)	$ 2,000	$ 1,000

Supplemental Financial Statement Information - Rental Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Rental equipment, net	$ 26,320		$ 26,320		$ 27,139
Rental Equipment
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Rental equipment	63,310		63,310		63,184
Accumulated depreciation	(36,990)		(36,990)		(36,045)
Rental equipment, net	26,320		26,320		$ 27,139
Depreciation	$ 1,700	$ 2,300	$ 5,900	$ 5,400

Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Current assets:

Cash and cash equivalents

$ 80,456

$ 24,554

Restricted cash

20,703

186

Accounts receivable, less allowances of $2,288 and $1,513, respectively

238,543

166,301

Inventories, net

313,337

264,374

Prepaid expenses and other current assets

36,538

22,773

Total current assets

689,577

478,188

Property, plant and equipment, net

111,949

64,395

Rental equipment, net

26,320

27,139

Goodwill

397,762

348,048

Deferred tax asset

189

Intangible assets, net

265,319

227,994

Cash value of life insurance

18,001

17,166

Right of use operating lease assets

79,791

46,755

Other assets

7,194

5,736

Total assets

1,595,968

1,215,610

Current liabilities:

Accounts payable

107,140

80,486

Current portion of long-term debt

32,335

16,352

Current portion of lease liabilities

13,241

9,964

Accrued expenses and other current liabilities

97,191

62,677

Total current liabilities

249,907

169,479

Long-term debt, less current portion, net

550,526

395,825

Lease liabilities

70,353

39,828

Deferred tax liability

24,452

23,834

Other liabilities

24,621

23,649

Total liabilities

919,859

652,615

Commitments and contingencies (Note 14)

Stockholders' Equity

Preferred Stock, $1 par value: Authorized - 500,000 shares, issued and outstanding — None

^[1]

Common Stock, $1 par value: Authorized - 70,000,000 shares Issued - 47,479,256 and 39,460,724 shares, respectively Outstanding - 46,844,598 and 38,833,568 shares, respectively

^[1]

46,845

38,834

Capital in excess of par value

^[1]

670,287

572,379

Retained deficit

^[1]

(18,377)

(25,736)

Treasury stock – 634,658 and 627,156 shares, respectively

^[1]

(12,697)

(12,526)

Accumulated other comprehensive income (loss)

^[1]

(9,949)

(9,956)

Total stockholders’ equity

^[1]

676,109

562,995

Total liabilities and stockholders’ equity

^[1]

$ 1,595,968

$ 1,215,610

[1]	(1) The accompanying Unaudited Condensed Consolidated Financial Statements and notes thereto have been retroactively adjusted to reflect the two-for-one stock split completed in August 2023. See Note 1 – Nature of Operations and Basis of Presentation for details.

Business Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition [Line Items]
Revenue	$ 104,796	$ 197,909	$ 132,797	$ 397,106
Net Income	(7,388)	12,645	(8,253)	25,534
Lawson
Business Acquisition [Line Items]
Revenue	0	126,693	0	250,364
Net Income	0	8,282	0	12,883
Other Acquisitions
Business Acquisition [Line Items]
Revenue	104,796	71,216	132,797	146,742
Net Income	(7,388)	4,363	(8,253)	12,651
TestEquity And Gexpro \| Lawson
Business Acquisition [Line Items]
Pro Forma revenue	438,909	457,958	1,347,226	1,320,226
Pro Forma net income	$ (1,568)	$ 13,056	$ 8,175	$ 12,147

Earnings Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Note 12 – Earnings Per Share

As a result of the Stock Split and Mergers discussed in Note 1 – Nature of Operations and Basis of Presentation, all historical per share data, number of shares and numbers of equity awards were retroactively adjusted. The following table provides the computation of basic and diluted earnings per share:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share and per share data)	2023		2022		2023		2022

Basic income per share:
Net income (loss)	$	(1,568)	$	16,541	$	7,363	$	9,289
Basic weighted average shares outstanding	46,737,443		38,879,992		44,216,541		34,287,628
Basic income (loss) per share of common stock	$	(0.03)	$	0.43	$	0.17	$	0.27

Diluted income per share:
Net income (loss)	$	(1,568)	$	16,541	$	7,363	$	9,289
Basic weighted average shares outstanding	46,737,443		38,879,992		44,216,541		34,287,628
Effect of dilutive securities	—		426,716		380,878		626,506





Diluted weighted average shares outstanding	46,737,443		39,306,708		44,597,419		34,914,134
Diluted income (loss) per share of common stock	$	(0.03)	$	0.42	$	0.17	$	0.27
Anti-dilutive securities excluded from the calculation of diluted income per share	448,910		493,914		—		496,000

Stock-Based Compensation - Equity Compensation Plans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Stock-based compensation	$ 1.0	$ (3.6)	$ 5.4	$ 0.4
Stock-based compensation liability	$ 5.1		$ 5.1		$ 3.3

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical)		1 Months Ended
	Aug. 15, 2023	Aug. 31, 2023
Income Statement [Abstract]
Stock split ratio, common stock	2	2

Stockholders' Equity	9 Months Ended
Stockholders' Equity	Sep. 30, 2023
Equity [Abstract]
Stockholders' Equity Note Disclosure	Note 11 – Stockholders' Equity Stock Split On August 15, 2023, DSG announced that its Board of Directors approved and declared the Stock Split which entitled each stockholder of record as of the close of business on August 25, 2023 to receive one additional share of DSG common stock for each share of DSG common stock then-held. The additional shares were distributed after the close of trading on August 31, 2023, and shares of DSG common stock began trading at the split-adjusted basis on September 1, 2023. Accordingly, all share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split. Stockholders’ equity has been retroactively adjusted, where applicable, to give effect to the Stock Split for all periods presented by reclassifying the par value of the additional shares issued in connection with the Stock Split to Common stock from Capital in excess of par value. Rights Offering On May 9, 2023, the Company commenced a Rights Offering to raise gross proceeds of up to approximately $100 million. The Rights Offering provided one transferable subscription right for each share of DSG common stock held by holders of DSG common stock on record as of the close of business on May 1, 2023. Each subscription right entitled the holder to purchase 0.0525 shares of DSG common stock at a subscription price of $22.50 per share. The subscription rights were transferable, but were not listed for trading on any stock exchange or market. In addition, holders of subscription rights who fully exercised their subscription rights were entitled to oversubscribe for additional shares of DSG common stock, subject to proration. The Rights Offering closed on May 30, 2023 and was fully subscribed (taking into account the exercise of over-subscription rights) and raised approximately $100 million and resulted in the issuance of 4,444,444 shares of DSG common stock, at a purchase price of $22.50 per share. The Company incurred transaction costs related to the issuance of DSG common stock for the Rights Offering of $1.5 million, which were recorded against Capital in excess of par value in the Unaudited Condensed Consolidated Balance Sheet. DSG used the proceeds from the Rights Offering, in combination with borrowings under the 2023 Credit Agreement, to fund the Hisco Transaction. Stock Repurchase Program Under an existing stock repurchase program authorized by the Board of Directors, the Company may repurchase its common stock from time to time in open market transactions, privately negotiated transactions or by other methods. No shares were repurchased during the three and nine months ended September 30, 2023 under the Company's stock repurchase plan. During the third quarter of 2022, the Company repurchased 108,178 shares of Company common stock under the repurchase plan at an average cost of $17.93 per share for a total cost of $1.9 million. The remaining availability for stock repurchases under the program was $7.6 million at September 30, 2023.

The entire disclosure for equity.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Debt - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
Debt - Narrative (Details) - USD ($) $ in Thousands	Apr. 01, 2022	Sep. 30, 2023	Jun. 08, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Quarterly payments		$ 7,600
Line of Credit
Line of Credit Facility [Line Items]
Weighted average interest rate (as a percent)		7.40%
Deferred financing costs net of accumulated amortization		$ 9,200
Line of Credit \| Alternate Base Rate Or Canadian Prime Rate \| Minimum \| Secured Overnight Financing Rate (SOFR)
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	0.00%
Line of Credit \| Alternate Base Rate Or Canadian Prime Rate \| Maximum \| Secured Overnight Financing Rate (SOFR)
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.75%
Line of Credit \| Adjusted Term SOFR Or CDOR Rate \| Minimum \| Secured Overnight Financing Rate (SOFR)
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.00%
Line of Credit \| Adjusted Term SOFR Or CDOR Rate \| Maximum \| Secured Overnight Financing Rate (SOFR)
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	2.75%
Incremental term loan \| Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 305,000		$ 305,000
Revolving Credit Facility \| Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	200,000
Accordion feature	200,000
Deferred financing costs net of accumulated amortization		6,724		$ 4,925
Debt issuance costs, gross		2,500
Letter of Credit \| Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	25,000
Bridge Loan \| Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	10,000
Secured Debt \| Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	250,000
Line of credit facility, remaining borrowing capacity		198,300
Deferred financing costs incurred	4,000		$ 3,400
Deferred financing costs net of accumulated amortization		$ 6,700
Secured Debt \| Line of Credit \| Senior secured delayed draw term loan
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 50,000

Supplemental Financial Statement Information - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Condensed Financial Information Disclosure [Abstract]
Accrued compensation	$ 27,532	$ 24,094
Deferred acquisition payments and accrued earnout liabilities	16,461	1,383
Accrued and withheld taxes, other than income taxes	8,758	4,885
Accrued customer rebates	4,710	5,053
Accrued stock-based compensation	5,055	3,340
Accrued interest	3,592	1,775
Accrued severance and acquisition related retention bonus	12,648	927
Accrued health benefits	1,743	1,306
Deferred revenue	1,136	2,313
Accrued income taxes	734	731
Other	14,822	16,870
Total accrued expenses and other current liabilities	$ 97,191	$ 62,677

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Note 13 – Income Taxes The Company recorded income tax expense of $1.0 million, a (171.3)% effective tax rate for the three months ended September 30, 2023. Income tax expense of $8.5 million, a 33.9% effective tax rate was recorded for the three months ended September 30, 2022. The effective tax rate for the three months ended September 30, 2023 was higher than the U.S. statutory rate primarily due to adjustments to uncertain tax positions, a book loss for the current quarter, and other permanent items. The effective tax rate for the three months ended September 30, 2022 was higher than the U.S. statutory rate primarily due to state taxes, transaction costs, and other permanent items. The Company recorded income tax expense of $3.6 million, a 33.1% effective tax rate for the nine months ended September 30, 2023. Income tax expense of $3.9 million, a 29.6% effective tax rate was recorded for the nine months ended September 30, 2022. The effective tax rate for the nine months ended September 30, 2023 was higher than the U.S. statutory rate primarily due to state taxes, foreign operations, and other permanent items, offset by the release of a reserve for an uncertain tax benefit. The effective tax rate for the nine months ended September 30, 2022 was higher than the U.S. statutory rate primarily due to state taxes, transaction costs, and other permanent items. The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state and foreign jurisdictions. As of September 30, 2023, the Company is subject to U.S. federal income tax examinations for the years 2019 through 2021 and income tax examinations from various other jurisdictions for the years 2016 through 2022. Earnings from the Company’s foreign subsidiaries are considered to be indefinitely reinvested. A distribution of these non-U.S. earnings in the form of dividends or otherwise may subject the Company to foreign withholding taxes and U.S. federal and state taxes.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

Deferred Revenue Disclosure [Abstract]

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2023

Disaggregation of Revenue

Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to):


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
United States	$	344,920	$	284,771	$	936,289	$	668,504
Canada	35,727		36,879		108,380		82,931
Europe	20,805		13,391		55,261		35,377
Pacific Rim	2,477		2,549		5,468		7,711
Latin America	31,971		8,501		52,839		24,853
Other	3,009		1,060		6,926		3,196
Total revenue	$	438,909	$	347,151	$	1,165,163	$	822,572

Operating Lease Income

Rental revenue from operating leases:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Revenue from operating leases	$	4,323	$	5,542	$	12,831	$	13,879

Related Party Transactions (Details) - USD ($) $ in Thousands			3 Months Ended			9 Months Ended		12 Months Ended
	May 30, 2023	Apr. 01, 2022	Sep. 30, 2023	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Mar. 20, 2023	Jun. 01, 2023	Mar. 31, 2023
Related Party Transaction [Line Items]
Selling, general and administrative expenses			$ 132,514	$ 97,140		$ 370,911	$ 245,478
Settlement of related party obligations						$ 0	$ 5,276
Lawson
Related Party Transaction [Line Items]
Number of shares authorized (in shares)		18,240,334
TestEquity And Gexpro Services Former Owners \| Lawson
Related Party Transaction [Line Items]
Number of shares authorized (in shares)		20,600,000
Related Party \| Related Party, Managed Services Agreements
Related Party Transaction [Line Items]
Selling, general and administrative expenses					$ 500
Settlement of related party obligations		$ 5,300
Related Party \| Related Party, Consulting Services
Related Party Transaction [Line Items]
Selling, general and administrative expenses			$ 400
Related Party \| Related Party, Mergers \| TestEquity And Gexpro Services Former Owners \| Lawson
Related Party Transaction [Line Items]
Number of shares authorized (in shares)		20,600,000
Shares owned by related party (in shares)								32,600,000
Related Party \| Related Party, Mergers \| TestEquity And Gexpro Services Former Owners \| TestEquity And Gexpro
Related Party Transaction [Line Items]
Number of shares authorized (in shares)								3,400,000
CEO \| LCKM And Mr King
Related Party Transaction [Line Items]
Shares owned by related party (in shares)									36,400,000
Stock sold (in shares)	3,600,000
CEO \| DSG \| LCKM And Mr King
Related Party Transaction [Line Items]
Noncontrolling ownership (as a percent)		48.00%	77.60%			77.60%				77.40%

Leases - Cash Outflows of the Leasing Activity (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating cash flows from operating leases	$ (9,083)	$ (3,330)
Operating cash flows from financing leases	(186)	37
Payment of financing lease principal	$ (358)	$ (457)

Leases - Value of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Operating Leases
Remaining 2023	$ 5,030
2024	18,477
2025	18,179
2026	14,406
2027	12,326
Thereafter	40,120
Total lease payments	108,538
Less: Interest	(26,269)
Present value of lease liabilities	82,269
Financing Leases
Remaining 2023	165
2024	558
2025	364
2026	282
2027	95
Thereafter	5
Total lease payments	1,469
Less: Interest	(144)
Present value of lease liabilities	1,325
Total
Remaining 2023	5,195
2024	19,035
2025	18,543
2026	14,688
2027	12,421
Thereafter	40,125
Total lease payments	110,007
Less: Interest	(26,413)
Present value of lease liabilities	$ 83,594

Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Note 9 – Debt

The Company's outstanding long-term debt was comprised of the following:



(in thousands)	September 30, 2023		December 31, 2022
Senior secured revolving credit facility	$	—	$	122,000
Senior secured term loan	234,375		243,750
Senior secured delayed draw term loan	48,125		50,000
Incremental term loan	305,000		—
Other revolving line of credit	2,085		1,352


Total debt	589,585		417,102
Less current portion of long-term debt	(32,335)		(16,352)
Less deferred financing costs	(6,724)		(4,925)
Total long-term debt	$	550,526	$	395,825

Amended and Restated Credit Agreement

On April 1, 2022, DSG and certain of its subsidiaries entered into an Amended and Restated Credit Agreement by and among DSG, certain subsidiaries of DSG as borrowers or guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. Pursuant to the Amended and Restated Credit Agreement, the Company's previous credit agreement was amended and restated in its entirety.

On June 8, 2023, the Company and certain of its subsidiaries entered into the First Amendment to Amended and Restated Credit Agreement (the “First Amendment”), which amended the Amended and Restated Credit Agreement, dated as of April 1, 2022 (as amended by the First Amendment, the “2023 Credit Agreement”). The First Amendment provides for a $305 million incremental term loan.

The 2023 Credit Agreement provides for (i) a $200 million senior secured revolving credit facility, with a $25 million letter of credit sub-facility and a $10 million swingline loan sub-facility, (ii) a $250 million senior secured initial term loan facility, (iii) a $305 million incremental term loan, (iv) a $50 million senior secured delayed draw term loan facility and (v) the Company to increase the commitments thereunder from time to time by up to $200 million in the aggregate, subject to, among other things, the receipt of additional commitments from existing and/or new lenders and pro forma compliance with the financial covenants in the 2023 Credit Agreement.

On June 8, 2023, in connection with the Hisco Transaction, the Company borrowed the $305 million under the incremental term loan. These borrowings were used, among other things, to partially fund the Hisco Transaction, to repay certain existing indebtedness of Hisco, HISCO Acquisition Subsidiary I, Inc. and HISCOCAN Inc. and their respective subsidiaries and to pay fees and expenses incurred in connection with the Hisco Transaction and the First Amendment. Refer to Note 3 – Business Acquisitions for further details about the Hisco Transaction.

Each of the loans under the 2023 Credit Agreement mature on April 1, 2027. The Company is required to repay principal of approximately $7.6 million each quarter.

Net of outstanding letters of credit, there was $198.3 million of borrowing availability under the revolving credit facility as of September 30, 2023. The weighted average interest rate from January 1, 2023 through September 30, 2023 was 7.4%.

The loans under the 2023 Credit Agreement bear interest, at the Company’s option, at a rate equal to (i) the Alternate Base Rate or the Canadian Prime Rate (each as defined in the 2023 Credit Agreement), plus, in each case, an additional margin ranging from 0.0% to 1.75% per annum, depending on the total net leverage ratio of the Company and its restricted subsidiaries as of the most recent determination date under the 2023 Credit Agreement or (ii) the Adjusted Term SOFR Rate or the CDOR Rate (each as defined in the 2023 Credit Agreement), plus, in each case, an additional margin ranging from 1.0% to 2.75% per annum, depending on the total net leverage ratio of the Company and its restricted subsidiaries as of the most recent determination date under the 2023 Credit Agreement.

On April 1, 2022, deferred financing costs of $4.0 million were incurred in connection with the original Amended and Restated Credit Agreement, and on June 8, 2023, deferred financing costs of $3.4 million were incurred in connection with the First Amendment. Deferred financing costs are amortized over the life of the debt instrument and reported as interest expense. As of September 30, 2023, total deferred financing costs net of accumulated amortization were $9.2 million of which $6.7 million are included in Long-term debt, less current portion, net (related to the senior secured term loan, senior secured delayed draw term loan and incremental term loan) and $2.5 million are included in Other assets (related to the senior secured revolving credit facility) in the Unaudited Condensed Consolidated Balance Sheet.

The 2023 Credit Agreement contains various covenants, including financial maintenance covenants requiring the Company to maintain compliance with a consolidated minimum interest coverage ratio and a maximum total net leverage ratio, each determined in accordance with the terms of the 2023 Credit Agreement. The Company was in compliance with all financial covenants set forth in the 2023 Credit Agreement as of September 30, 2023.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Commitments and Contingencies (Details) $ in Millions	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Accrued environmental matter costs	$ 0.1
Purchase commitment	$ 200.0

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Accordingly, the unaudited condensed consolidated financial statements for the nine months ended September 30, 2022 reflect the results of operations of TestEquity and Gexpro Services on a consolidated basis, and the results of operations of DSG's legacy Lawson business are only included subsequent to the April 1, 2022 Merger Date. The combined operations of all three entities are included in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023 and the three months ended September 30, 2022. The unaudited condensed consolidated financial statements as of September 30, 2023 and December 31, 2022 reflect the financial position of TestEquity, Gexpro Services and DSG's legacy Lawson business on a consolidated basis.
Basis of Accounting	The accompanying unaudited condensed consolidated financial statements of DSG have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not contain all disclosures required by GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with DSG's audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission ("SEC") and the Lawson Products, Inc. unaudited condensed consolidated financial statements and accompanying notes included in DSG’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022. A
Accounting Pronouncements - Adopted	Accounting Pronouncements - Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises the requirements for how an entity should measure credit losses on financial instruments. The pronouncement was effective for smaller reporting companies in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and the new guidance will be applied on a prospective basis. The Company adopted this guidance on January 1, 2023. The adoption had no material impact on the Company's financial condition, results of operations or cash flows. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an entity to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The pronouncement is effective in fiscal years beginning after December 15, 2022 and early adoption is permitted. The Company adopted this guidance on January 1, 2023. The adoption had no impact on the Company's financial condition, results of operations or cash flows and will be applied to business combinations on or after the adoption date.
Revenue Recognition	The Lawson segment has two distinct performance obligations offered to its customers: a product performance obligation and a service performance obligation, and accordingly, two separate revenue streams. Although Lawson has identified that it offers its customers both a product and a service obligation, the customer only receives one invoice per transaction with no price allocation between these obligations. Lawson does not price its offerings based on any allocation between these obligations. Lawson generates revenue primarily from the sale of MRO products to its customers. Revenue related to product sales is recognized at the time that control of the product has been transferred to the customer; either at the time the product is shipped or the time the product has been received by the customer. Lawson does not commit to long-term contracts to sell customers a certain minimum quantity of products. Lawson offers a VMI service proposition to its customers. A portion of these services, primarily related to stocking of product and maintenance of the MRO inventory, is provided over a short period of time after control of the purchased product has been transferred to the customer. Since certain obligations pursuant to the VMI service agreement have not been provided at the time the control of the product transfers to the customer, that portion of expected consideration is deferred until the time that those services have been provided and the related performance obligations have been satisfied. TestEquity Segment TestEquity’s contracts with customers generally represent a single performance obligation to sell its products. Revenue from contracts with customers reflect the transaction prices for contracts reduced by variable consideration. TestEquity provides a rebate to select customers if pre-determined purchase thresholds are met. The rebate consideration is not in exchange for a distinct product or service. Variable consideration is estimated using the expected-value method considering all reasonably available information, including TestEquity’s historical experience and current expectations, and is reflected in the transaction price when sales are recorded. Sales returns are generally accepted by TestEquity; however, sales returns are not material to the Company’s operations. TestEquity provides an assurance type warranty which is not sold separately and does not represent a separate performance obligation. TestEquity generates revenue from contracts with customers through the sale of new and used electronic test and measurement products, industrial and electronic production supplies, and adhesive solutions. Typically, TestEquity has a purchase order or master service agreement with the customer that specifies the products and/or services to be provided. TestEquity generally invoices customers as products are shipped. Payment terms on invoiced amounts are typically due and payable 30 days after the date of shipment. Generally, customers gain control of the products upon providing the product to the carrier, or when services are completed. For the majority of transactions, TestEquity recognizes revenue at the time of shipment, when control passes to the customer. For consigned inventory, revenue is recognized when inventory is removed from TestEquity’s stock location and control passes to the customer. Gexpro Services Segment Gexpro Services’ contracts with customers generally represent a single performance obligation to sell its products. Revenue from sales of Gexpro Services’ products is recognized upon transfer of control to the customer, which is typically when the product has been shipped from its distribution facilities. The transaction price is the amount of consideration to which Gexpro Services expects to be entitled in exchange for transferring products to the customer. Revenue is recorded based on the transaction price, which includes fixed consideration and an estimate of variable consideration such as, early payment/volume discounts and rebates. The amount of variable consideration included in the transaction price is constrained and is included only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Gexpro Services’ products are marketed and sold primarily to original equipment manufacturers globally. Sales of products are subject to economic conditions and may fluctuate based on changes in the industry, trade policies and financial markets. Payment terms on invoiced amounts range from 10 to 120 days. In instances where the timing of revenue recognition differs from the timing of the right to invoice, the Company has determined that a significant financing component does not exist.

Disclosure of accounting policy for revenue from contract with customer.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
-Paragraph 17
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-17

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-18

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
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Revenue Recognition - Lease Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 438,909	$ 347,151	$ 1,165,163	$ 822,572
Rental Program
Disaggregation of Revenue [Line Items]
Revenue	$ 4,323	$ 5,542	$ 12,831	$ 13,879

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
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-Section S99
-Paragraph 1
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Business Combination and Asset Acquisition [Abstract]

Business Acquisitions (Tables)

9 Months Ended

Sep. 30, 2023

Schedule of Business Acquisitions, by Acquisition

Under the acquisition method of accounting, the estimated consideration exchanged was calculated as follows:



(in thousands, except share data)	April 1, 2022
Number of DSG common shares	18,240,334
DSG common stock closing price per share on March 31, 2022	$	19.27
Fair value of shares exchanged	$	351,491

Other consideration(1)	1,910

Total consideration exchanged	$	353,401

(1)Fair value adjustment of stock-based compensation awards.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed


(in thousands)	Final Purchase Price Allocation
Current assets	$	148,308
Property, plant and equipment	57,414
Right of use assets	18,258
Other intangible assets	119,060
Deferred tax liability, net of deferred tax asset	(19,394)
Other assets	18,373
Current liabilities	(71,165)
Long-term obligations	(25,746)
Lease and financing obligations	(28,827)
Derivative earnout liability	(43,900)

Goodwill	181,020
Total consideration exchanged	$	353,401


	Hisco
(in thousands)	June 8, 2023 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Current assets	$	131,950	$	(2,565)	$	129,385
Property, plant and equipment	48,326		—		48,326
Right of use assets	21,102		1,188		22,290
Other intangible assets:
Customer relationships	41,800		(200)		41,600
Trade names	25,600		—		25,600

Deferred tax liability, net of deferred tax asset	(2,544)		40		(2,504)
Other assets	2,495		—		2,495
Accounts payable	(16,689)		—		(16,689)
Lease liabilities	(22,372)		293		(22,079)
Accrued expenses and other liabilities	(8,961)		—		(8,961)

Goodwill	49,718		(713)		49,005
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(1,957)	$	268,468
Cash consideration	$	252,007	$	—	$	252,007
Deferred consideration	12,418		3,943		16,361
Contingent consideration	6,000		(5,900)		100
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(1,957)	$	268,468

The purchase consideration for each business acquired and the allocation of the consideration exchanged to the estimated fair values of assets acquired and liabilities assumed is summarized below:


(in thousands)	Interworld Highway, LLC		Resolux		Frontier		National Test Equipment		Instrumex
Acquisition date	April 29, 2022		January 3, 2022		March 31, 2022		June 1, 2022		December 1, 2022		Total
Current assets	$	15,018	$	10,210	$	2,881	$	2,187	$	3,495	$	33,791
Property, plant and equipment	313		459		1,189		642		30		2,633
Right of use assets	—		1,125		9,313		—		—		10,438
Other intangible assets:
Customer relationships	6,369		11,400		9,300		2,100		800		29,969
Trade names	4,600		6,100		3,000		—		—		13,700

Other assets	10		86		—		—		14		110
Accounts payable	(8,856)		(3,058)		(778)		(196)		(1,305)		(14,193)
Current portion of long-term debt	—		—		—		(2,073)		—		(2,073)
Accrued expenses and other liabilities	—		(4,747)		(1,462)		(1,171)		(626)		(8,006)
Lease liabilities	—		(1,125)		(9,313)		—		—		(10,438)
Long-term debt	—		—		—		—		(2,105)		(2,105)
Goodwill	37,236		10,305		11,544		5,703		1,989		66,777
Total purchase consideration exchanged, net of cash acquired	$	54,690	$	30,755	$	25,674	$	7,192	$	2,292	$	120,603
Cash consideration	$	54,690	$	30,755	$	25,674	$	6,023	$	1,818	$	118,960
Seller's notes	—		—		—		1,169		—		1,169
Deferred consideration	—		—		—		—		474		474
Total purchase consideration exchanged, net of cash acquired	$	54,690	$	30,755	$	25,674	$	7,192	$	2,292	$	120,603

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

The allocation of consideration exchanged to other intangible assets acquired was as follows:


(in thousands)	Fair Value		Estimated Life (in years)
Customer relationships	$	76,050	19
Trade names	43,010		8
Total other intangible assets	$	119,060

Acquisition Pro Forma Information


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Revenue	$	438,909	$	457,958	$	1,347,226	$	1,320,226


Net income	$	(1,568)	$	13,056	$	8,175	$	12,147


	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
(in thousands)	Lawson		Other Acquisitions		Total		Lawson		Other Acquisitions		Total
Revenue	$	—	$	104,796	$	104,796	$	126,693	$	71,216	$	197,909
Net Income	$	—	$	(7,388)	$	(7,388)	$	8,282	$	4,363	$	12,645

	Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022
(in thousands)	Lawson		Other Acquisitions		Total		Lawson		Other Acquisitions		Total
Revenue	$	—	$	132,797	$	132,797	$	250,364	$	146,742	$	397,106
Net Income	$	—	$	(8,253)	$	(8,253)	$	12,883	$	12,651	$	25,534

Goodwill and Intangible Assets - Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 360,100		$ 360,100		$ 293,181
Accumulated Amortization	(94,781)		(94,781)		(65,187)
Total	265,319		265,319		227,994
Amortization of intangible assets	11,300	$ 5,600	29,900	$ 20,900
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	117,780		117,780		92,286
Accumulated Amortization	(26,498)		(26,498)		(17,401)
Total	91,282		91,282		74,885
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	234,346		234,346		192,934
Accumulated Amortization	(64,276)		(64,276)		(44,481)
Total	170,070		170,070		148,453
Other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	7,974		7,974		7,961
Accumulated Amortization	(4,007)		(4,007)		(3,305)
Total	$ 3,967		$ 3,967		$ 4,656

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Revenue
Lawson(1)	$	114,477	$	109,418	$	358,903	$	216,752
TestEquity	207,657		116,709		451,082		286,984
Gexpro Services	103,232		103,749		312,523		285,224
All Other(2)	13,543		17,275		42,655		33,612
Total revenue	$	438,909	$	347,151	$	1,165,163	$	822,572

Operating income (loss)
Lawson(1)	$	10,643	$	5,352	$	27,358	$	2,792
TestEquity	(5,027)		7,576		(8,183)		7,443
Gexpro Services	7,332		7,992		23,484		16,972
All Other(2)	(165)		1,107		621		1,921
Total operating income (loss)	$	12,783	$	22,027	$	43,280	$	29,128

(1)Includes the operating results of Lawson only subsequent to the Merger Date of April 1, 2022 and not Lawson operating results prior to the Mergers.

(2) Includes the operating results of All Other only subsequent to the Merger Date of April 1, 2022 and not All Other operating results prior to the Mergers.

Earnout Liabilities (Details) $ in Millions					3 Months Ended		9 Months Ended
Earnout Liabilities (Details) $ in Millions	Mar. 20, 2023 shares	Dec. 31, 2022 USD ($) shares	Apr. 29, 2022 shares	Apr. 01, 2022 USD ($) shares	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Jun. 08, 2023 USD ($)	Jun. 07, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 20, 2022 earnoutProvision
Business Acquisition [Line Items]
Fair value of earnout derivative liability				$ 43.9
Income on earnout liabilities		$ 0.3				$ 10.3		$ 4.6
Lawson
Business Acquisition [Line Items]
Number of earnout provisions \| earnoutProvision												2
Number of shares authorized (in shares) \| shares				18,240,334
Lawson \| Maximum
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares				2,324,000
Lawson \| TestEquity and Gexpro Services Shareholders
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares	1,076,000			1,076,000
Lawson \| TestEquity Equityholder
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares	1,400,000			1,400,000
Lawson \| Gexpro Services Stockholder
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares		924,000	1,400,000	924,000
Lawson \| TestEquity And Gexpro \| Earnout Shares
Business Acquisition [Line Items]
Number of shares authorized (in shares) \| shares	3,400,000
Hisco
Business Acquisition [Line Items]
Fair value of earn-out liability							$ 0.1		$ 6.0
Hisco \| Maximum
Business Acquisition [Line Items]
Fair value of earn-out liability									12.6
Prior to Hisco
Business Acquisition [Line Items]
Fair value of earn-out liability							1.5		$ 1.5
Prior to Hisco \| Maximum
Business Acquisition [Line Items]
Fair value of earn-out liability										$ 3.8
Frontier
Business Acquisition [Line Items]
Income on earnout liabilities							0.7
Fair value of earn-out liability		$ 1.7					$ 0.0				$ 0.9
Earn-out payments					$ 1.0
Frontier \| Maximum
Business Acquisition [Line Items]
Fair value of earn-out liability											$ 3.0

Goodwill and Intangible Assets - Maturity of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remaining 2023	$ 8,952
2024	42,856
2025	39,191
2026	36,217
2027	31,409
2028	27,537
Thereafter	79,157
Total	$ 265,319	$ 227,994

Segment Reporting - Reportable Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) segment branch	Sep. 30, 2022 USD ($)
Segment Reporting [Abstract]
Number of reportable segments \| segment			3
Number of branches \| branch			14
Segment Reporting Information [Line Items]
Revenue	$ 438,909	$ 347,151	$ 1,165,163	$ 822,572
Operating income (loss)	12,783	22,027	43,280	29,128
All Other
Segment Reporting Information [Line Items]
Revenue	13,543	17,275	42,655	33,612
Operating income (loss)	(165)	1,107	621	1,921
Lawson \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	114,477	109,418	358,903	216,752
Operating income (loss)	10,643	5,352	27,358	2,792
TestEquity \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	207,657	116,709	451,082	286,984
Operating income (loss)	(5,027)	7,576	(8,183)	7,443
Gexpro Services \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	103,232	103,749	312,523	285,224
Operating income (loss)	$ 7,332	$ 7,992	$ 23,484	$ 16,972

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 438,909	$ 347,151	$ 1,165,163	$ 822,572
United States
Disaggregation of Revenue [Line Items]
Revenue	344,920	284,771	936,289	668,504
Canada
Disaggregation of Revenue [Line Items]
Revenue	35,727	36,879	108,380	82,931
Europe
Disaggregation of Revenue [Line Items]
Revenue	20,805	13,391	55,261	35,377
Pacific Rim
Disaggregation of Revenue [Line Items]
Revenue	2,477	2,549	5,468	7,711
Latin America
Disaggregation of Revenue [Line Items]
Revenue	31,971	8,501	52,839	24,853
Other
Disaggregation of Revenue [Line Items]
Revenue	$ 3,009	$ 1,060	$ 6,926	$ 3,196

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

Selling, general and administrative expenses

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Note 15 – Related Party Transactions Management Services Agreements Prior to the Mergers, a subsidiary of TestEquity was party to a management agreement with Luther King Capital Management Corporation (“LKCM”) for certain advisory and consulting services (the “TestEquity Management Agreement”), and a subsidiary of Gexpro Services was party to a management agreement with LKCM for certain advisory and consulting services (the “Gexpro Services Management Agreement”). In connection with the closing of the Mergers on April 1, 2022, (i) all of the TestEquity subsidiary’s rights, liabilities and obligations under the TestEquity Management Agreement were novated to, transferred to and assumed by the TestEquity Equityholder, and LKCM released the TestEquity subsidiary from all obligations and claims under the TestEquity Management Agreement, and (ii) all of the Gexpro Services subsidiary’s rights, liabilities and obligations under the Gexpro Services Management Agreement were novated to, transferred to and assumed by the Gexpro Services Stockholder, and LKCM released the Gexpro Services subsidiary from all obligations and claims under the Gexpro Services Management Agreement (collectively, the “Novations”). During the first three months of 2022, expense of $0.5 million was recorded within Selling, general and administrative expenses within the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Loss), reflecting expenses accrued under these management agreements from January 1, 2022 through the April 1, 2022 Merger Date. As of April 1, 2022, the prior obligation of $5.3 million was effectively settled and considered to be a deemed equity contribution by LKCM recorded to additional paid in capital. As a result of the Novations, no additional expense under these management agreements has been incurred subsequent to the Mergers. Consulting Services Subsequent to the Mergers, individuals employed by LKCM Headwater Operations, LLC, a related party of LKCM, have provided the Company with certain consulting services in order to identify cost savings, revenue enhancements and operational synergies of the combined companies. For the nine months ended September 30, 2023, expense of $0.4 million was recorded within Selling, general and administrative expenses within the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Loss), reflecting expenses accrued for these consulting services. TestEquity and Gexpro Services Mergers Immediately prior to the Mergers, entities affiliated with LKCM and J. Bryan King (President and Chief Executive Officer of DSG and Chairman of the DSG Board of Directors), including private investment partnerships for which LKCM serves as investment manager, owned a majority of the ownership interests in the TestEquity Equityholder (which in turn owned all of the outstanding equity interests of TestEquity as of immediately prior to the completion of the TestEquity Merger). As of the Merger Date, Mr. King was a director of the TestEquity Equityholder. In addition, as of the Merger Date, Mark F. Moon (a member of the DSG Board of Directors) was a director of, and held a direct or indirect equity interest in, the TestEquity Equityholder. Immediately prior to the Mergers, entities affiliated with LKCM and Mr. King, including private investment partnerships for which LKCM serves as investment manager, owned a majority of the ownership interests in the Gexpro Services Stockholder (which in turn owned all of the then outstanding stock of Gexpro Services). Immediately prior to the Mergers, entities affiliated with LKCM and Mr. King beneficially owned approximately 48% of the then-outstanding shares of DSG common stock. As a result of the issuance of 20.6 million shares at the closing of the Mergers and the issuance of the additional 3.4 million shares in accordance with the earnout provisions of the TestEquity Merger Agreement and the Gexpro Services Merger Agreement on March 20, 2023, entities affiliated with LKCM and Mr. King beneficially owned in the aggregate approximately 32.6 million shares of DSG common stock representing approximately 77.4% of the outstanding shares of DSG common stock as of March 31, 2023. Rights Offering Certain entities affiliated with LKCM and J. Bryan King exercised their basic subscription rights and over-subscription rights in the Rights Offering and purchased approximately 3.6 million additional shares of DSG common stock at a purchase price of $22.50 per share. Following the completion of the Rights Offering on May 30, 2023, entities affiliated with LKCM and Mr. King beneficially owned in the aggregate approximately 36.4 million shares of DSG common stock as of June 1, 2023, representing approximately 77.6% of the outstanding shares of DSG common stock as of September 30, 2023. Board of Directors M. Bradley Wallace, who became a director of the Company upon his election at the Company's 2023 annual stockholders meeting on May 19, 2023, is a Founding Partner of LKCM Headwater Investments, the private capital investment group of LKCM.

Supplemental Financial Statement Information - Narrative (Details) $ in Millions	Jun. 08, 2023 USD ($)
Condensed Financial Information Disclosure [Abstract]
Restricted Cash	$ 20.7
Escrow deposit	12.5
Restricted cash as collateral for certain borrowings	$ 8.2

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Income Statement [Abstract]

Revenue

$ 438,909

$ 347,151

$ 1,165,163

$ 822,572

Cost of goods sold

293,612

227,984

750,972

547,966

Gross profit

145,297

119,167

414,191

274,606

132,514

97,140

370,911

245,478

Operating income (loss)

12,783

22,027

43,280

29,128

Interest expense

(12,895)

(6,097)

(30,057)

(16,704)

Loss on extinguishment of debt

(3,395)

Change in fair value of earnout liabilities

667

9,641

646

3,948

Other income (expense), net

(1,133)

(550)

(2,869)

224

Income (loss) before income taxes

(578)

25,021

11,000

13,201

Income tax expense

990

8,480

3,637

3,912

Basic income (loss) per share of common stock (in USD per share)

$ (1,568)

$ 16,541

$ 7,363

$ 9,289

^[1]

$ (0.03)

$ 0.43

$ 0.17

$ 0.27

Diluted income (loss) per share of common stock (in USD per share)

^[1]

$ (0.03)

$ 0.42

$ 0.17

$ 0.27

Comprehensive income (loss)

$ (1,568)

$ 16,541

$ 7,363

$ 9,289

(3,579)

(9,774)

128

(12,094)

Comprehensive income (loss)

464

(121)

$ (4,683)

$ 6,767

$ 7,370

$ (2,805)

[1]	(1) The accompanying Unaudited Condensed Consolidated Financial Statements and notes thereto have been retroactively adjusted to reflect the two-for-one stock split completed in August 2023. See Note 1 – Nature of Operations and Basis of Presentation for details.

Business Acquisitions - Intangible Assets Acquired (Details) - Lawson - TestEquity And Gexpro $ in Thousands	Apr. 01, 2022 USD ($)
Business Acquisition [Line Items]
Fair Value	$ 119,060
Customer relationships
Business Acquisition [Line Items]
Fair Value	$ 76,050
Estimated Life (in years)	19 years
Trade names
Business Acquisition [Line Items]
Fair Value	$ 43,010
Estimated Life (in years)	8 years

Supplemental Financial Statement Information

9 Months Ended

Sep. 30, 2023

Condensed Financial Information Disclosure [Abstract]

Supplemental Financial Statements Information

Note 5 – Supplemental Financial Statement Information

Restricted Cash

The Company has agreed to maintain restricted cash of $20.7 million under agreements with outside parties. An escrow account of $12.5 million was established in conjunction with the Hisco Transaction, to be released upon Hisco meeting certain working capital and other post-closing requirements as of the one year post-acquisition date. The Company is restricted from withdrawing this balance without the prior consent of the sellers. The remaining balance of $8.2 million of restricted cash represents collateral for certain borrowings under the 2023 Credit Agreement, and the Company is restricted from withdrawing this balance without the prior consent of the respective lenders.

Inventories, net

Inventories, net, consisting of purchased products and manufactured electronic equipment offered for resale, were as follows:



(in thousands)	September 30, 2023		December 31, 2022
Inventories, gross	$	329,221	$	275,072
Reserve for obsolete and excess inventory	(15,884)		(10,698)
Inventories, net	$	313,337	$	264,374

Property, Plant and Equipment, net

Components of property, plant and equipment were as follows:



(in thousands)	September 30, 2023		December 31, 2022
Land	$	16,753	$	9,578
Buildings and improvements	50,009		27,199
Machinery and equipment	48,235		26,948
Capitalized software	9,140		7,889
Furniture and fixtures	10,707		6,346
Vehicles	1,703		1,713
Construction in progress(1)	3,804		3,140
Total	140,351		82,813
Accumulated depreciation and amortization	(28,402)		(18,418)
Property, plant and equipment, net	$	111,949	$	64,395

(1)Construction in progress primarily related to upgrades to certain of the Company's information technology systems that we expect to place in service in the next 12 months.

Depreciation expense for property, plant and equipment was $3.5 million and $1.1 million for the third quarter of 2023 and 2022, respectively, and $9.5 million and $4.0 million for the first nine months of 2023 and 2022, respectively. Amortization expense for capitalized software was $0.5 million and $0.0 million for the third quarter of 2023 and 2022, respectively, and $2.0 million and $1.0 million for the first nine months of 2023 and 2022, respectively.

Rental Equipment, net

Rental equipment, net consisted of the following:



(in thousands)	September 30, 2023		December 31, 2022
Rental equipment	$	63,310	$	63,184
Accumulated depreciation	(36,990)		(36,045)
Rental equipment, net	$	26,320	$	27,139

Depreciation expense included in cost of sales for rental equipment was $1.7 million and $2.3 million for the third quarter of 2023 and 2022, respectively and $5.9 million and $5.4 million for the first nine months of 2023 and 2022, respectively. Refer to Note 4 – Revenue Recognition for a discussion on the Company's activities as lessor.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


(in thousands)	September 30, 2023		December 31, 2022
Accrued compensation	$	27,532	$	24,094
Deferred acquisition payments and accrued earnout liabilities	16,461		1,383
Accrued severance and acquisition related retention bonus	12,648		927

Accrued and withheld taxes, other than income taxes	8,758		4,885
Accrued stock-based compensation	5,055		3,340
Accrued customer rebates	4,710		5,053
Accrued interest	3,592		1,775
Accrued health benefits	1,743		1,306
Deferred revenue	1,136		2,313
Accrued income taxes	734		731
Other	14,822		16,870
Total accrued expenses and other current liabilities	$	97,191	$	62,677

Other Liabilities

Other liabilities consisted of the following:


(in thousands)	September 30, 2023		December 31, 2022
Security bonus plan	$	9,109	$	9,651
Deferred compensation	10,854		9,962
Other	4,658		4,036
Total other liabilities	$	24,621	$	23,649

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The following table provides the computation of basic and diluted earnings per share:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share and per share data)	2023		2022		2023		2022

Basic income per share:
Net income (loss)	$	(1,568)	$	16,541	$	7,363	$	9,289
Basic weighted average shares outstanding	46,737,443		38,879,992		44,216,541		34,287,628
Basic income (loss) per share of common stock	$	(0.03)	$	0.43	$	0.17	$	0.27

Diluted income per share:
Net income (loss)	$	(1,568)	$	16,541	$	7,363	$	9,289
Basic weighted average shares outstanding	46,737,443		38,879,992		44,216,541		34,287,628
Effect of dilutive securities	—		426,716		380,878		626,506





Diluted weighted average shares outstanding	46,737,443		39,306,708		44,597,419		34,914,134
Diluted income (loss) per share of common stock	$	(0.03)	$	0.42	$	0.17	$	0.27
Anti-dilutive securities excluded from the calculation of diluted income per share	448,910		493,914		—		496,000

Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Stock-Based Compensation Details
Vesting period (in years)		5 years
Restricted stock units
Stock-Based Compensation Details
Shares issued (in shares)		53
Vesting period (in years)	5 years	5 years
Grant date fair value		$ 1.2

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

Stock-Based Compensation - Stock Option Assumptions (Details) - Stock options	9 Months Ended
	Sep. 30, 2023 USD ($)
Stock-Based Compensation Details
Expected annual dividend	$ 0
Minimum
Stock-Based Compensation Details
Expected volatility	45.20%
Risk-free rate of return	3.60%
Expected term (in years)	6 years 2 months 12 days
Maximum
Stock-Based Compensation Details
Expected volatility	45.50%
Risk-free rate of return	4.50%
Expected term (in years)	6 years 6 months

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 348,048
Acquisitions(1)	49,941
Impact of foreign exchange rates	(227)
Goodwill, ending balance	397,762
All Other
Goodwill [Roll Forward]
Goodwill, beginning balance	22,750
Acquisitions(1)	0
Impact of foreign exchange rates	(42)
Goodwill, ending balance	22,708
Lawson \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	155,773
Acquisitions(1)	0
Impact of foreign exchange rates	(11)
Goodwill, ending balance	155,762
TestEquity \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	114,104
Acquisitions(1)	49,941
Impact of foreign exchange rates	0
Goodwill, ending balance	164,045
Gexpro Services \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	55,421
Acquisitions(1)	0
Impact of foreign exchange rates	(174)
Goodwill, ending balance	$ 55,247

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.