0000703604-24-000079 | 10-Q | XBRL Viewer | Distribution Solutions Group INC

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Debt - Narrative (Details) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended
Debt - Narrative (Details) - USD ($) $ in Thousands	Jun. 28, 2024	Jun. 08, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Dec. 31, 2022	Apr. 01, 2022
Line of Credit Facility [Line Items]
Quarterly payments		$ 7,600
Long-term debt, year one			$ 30,300		$ 30,300
Long-term debt, year two			30,300		30,300
Long-term debt, year three			30,300		30,300
Long-term debt, year four			526,600		526,600
Amortization of debt issuance costs					1,320	$ 1,002
Line of Credit
Line of Credit Facility [Line Items]
Deferred financing costs net of accumulated amortization			7,300		7,300
Debt instrument, covenant, default rate									2.00%
Line of Credit \| Alternate Base Rate or Canadian Prime Rate \| Minimum
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
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.75%
Line of Credit \| Adjusted Term SOFR or CORRA Rate \| Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.00%
Line of Credit \| Adjusted Term SOFR or CORRA Rate \| Maximum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	2.75%
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			5,283		5,283		$ 6,244
Debt issuance costs, net			2,000		2,000
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			153,000		153,000
Deferred financing costs incurred		3,400						$ 4,000
Amortization of debt issuance costs			700	$ 500	1,300	$ 1,000
Deferred financing costs net of accumulated amortization			$ 5,300		$ 5,300
Secured Debt \| Line of Credit \| Senior Secured Delayed Draw Term Loan
Line of Credit Facility [Line Items]
Maximum borrowing capacity		50,000
Incremental Term Loan \| Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 305,000

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2024
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	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, 2023. See Note 2 of the 2023 consolidated financial statements included in DSG’s Annual Report on Form 10-K for the year ended December 31, 2023 for further details of the Company’s significant accounting policies. Recent Accounting Pronouncements - Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The pronouncement is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption will have on its financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to require greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. The pronouncement is effective on a prospective basis for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the adoption on its financial statement disclosures.

Leases - Schedule of Value of Lease Liabilities Related to Operating and Finance Leases (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Operating Leases
Remaining 2024	$ 10,873
2025	21,567
2026	17,871
2027	15,904
2028	13,915
Thereafter	35,414
Total lease payments	115,544
Less: Interest	(26,643)
Present value of lease liabilities	88,901
Financing Leases
Remaining 2024	359
2025	523
2026	429
2027	200
2028	95
Thereafter	16
Total lease payments	1,622
Less: Interest	(166)
Present value of lease liabilities	1,456
Total
Remaining 2024	11,232
2025	22,090
2026	18,300
2027	16,104
2028	14,010
Thereafter	35,430
Total lease payments	117,166
Less: Interest	(26,809)
Present value of lease liabilities	90,357
Sublease Income
Remaining 2024	315
2025	640
2026	326
2027	0
2028	0
Thereafter	0
Total lease payments	$ 1,281

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2024	Jul. 26, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
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	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		46,757,360
Entity Central Index Key	0000703604
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31

Business Acquisitions - 2023 Acquisition (Narrative) (Details) - Hisco - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended				6 Months Ended		12 Months Ended			13 Months Ended
	Jun. 08, 2023	Sep. 30, 2024	Jun. 30, 2024	Sep. 30, 2023	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2025	Jun. 08, 2024	Dec. 31, 2023	Jun. 30, 2024
Business Acquisition [Line Items]
Preliminary purchase price	$ 267,200
Cash acquired from acquisition	12,200
Cash exchanged for equity related to retention bonuses	$ 37,500
Retention bonuses						$ 2,300				$ 1,800
Compensation expense			$ 6,400	$ 400	$ 2,300	$ 16,000	$ 2,300
Price per share (in dollars per share)	$ 22.50			$ 22.50
Maximum stock employees can purchase	$ 25,000
Stock sold (in shares)				144,608
Proceeds from employees for share purchases				$ 3,300
Increase in goodwill									$ 100		$ 122
Total purchase consideration exchanged, net of cash acquired, measurement period adjustments									$ 3,300		$ 3,269
Expected tax deductible goodwill amount										$ 41,400
Forecast
Business Acquisition [Line Items]
Cash exchanged for equity related to retention bonuses		$ 32,300						$ 1,100
Customer Relationships
Business Acquisition [Line Items]
Useful life (in years)			12 years			12 years					12 years
Trade Names
Business Acquisition [Line Items]
Useful life (in years)			8 years			8 years					8 years

Leases - Schedule of Value of Net Assets and Liabilities Related to Operating and Finance Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Total ROU operating lease assets	$ 84,878	$ 76,340
Total ROU financing lease assets	1,640	1,560
Total lease assets	$ 86,518	$ 77,900
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Total current lease obligation	Total current lease obligation
Total current operating lease obligation	$ 16,330	$ 13,010
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Total current lease obligation	Total current lease obligation
Total current financing lease obligation	$ 547	$ 539
Total current lease obligation	$ 16,877	$ 13,549
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Total long-term lease obligation	Total long-term lease obligation
Total long-term operating lease obligation	$ 72,571	$ 66,234
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Total long-term lease obligation	Total long-term lease obligation
Total long-term financing lease obligation	$ 909	$ 831
Total long-term lease obligation	$ 73,480	$ 67,065

Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Stock-based compensation expense (benefit)	$ (0.3)	$ 2.2	$ 1.9	$ 4.4
Stock-based compensation liability	$ 4.3		$ 4.3		$ 5.6
Restricted Stock Awards
Stock-Based Compensation Details
Stock-based awards issued (in shares)	117,000
Vested in period, fair value	$ 3.8
Restricted Stock Awards \| Minimum
Stock-Based Compensation Details
Vesting period (in years)	1 year
Restricted Stock Awards \| Maximum
Stock-Based Compensation Details
Vesting period (in years)	5 years

Business Acquisitions - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed of Safety Supply Illinois LLC (Details) - USD ($) $ in Thousands		5 Months Ended
	Jan. 19, 2024	Jun. 30, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill		$ 428,308	$ 399,925
Safety Supply Illinois LLC
Business Acquisition [Line Items]
Accounts receivable	$ 1,363	1,363
Inventory	1,399	1,399
Other current assets	10	10
Property, plant and equipment	228	228
Right of use assets	550	550
Other assets	11	11
Accounts payable	(205)	(205)
Lease liabilities	(550)	(550)
Accrued expenses and other liabilities	(25)	(25)
Goodwill	2,973	2,873
Goodwill, measurement period adjustments		(100)
Total purchase consideration exchanged, net of cash acquired	9,854	9,854
Total purchase consideration exchanged, net of cash acquired, measurement period adjustments		0
Cash consideration	8,904	8,904
Deferred consideration	950	950
Safety Supply Illinois LLC \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets	2,700	2,800
Other intangible assets, measurement period adjustments		100
Safety Supply Illinois LLC \| Trade names
Business Acquisition [Line Items]
Other intangible assets	$ 1,400	$ 1,400

Stockholders' Equity - Stock Repurchase Program (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023
Equity [Abstract]
Repurchase of common stock (in shares)	55,844	0	0
Stock repurchased (in USD per share)	$ 30.14
Repurchases of common stock	$ 1,683
Remaining amount	$ 27,300

Revenue Recognition

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 4 – Revenue Recognition

Disaggregation of Revenue

The Company’s revenue is primarily comprised of product sales to customers. The Company has disaggregated revenue by geographic area and by segment as it most reasonably depicts the amount, timing and uncertainty of revenue and cash flows generated from our contracts with customers. Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to):


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
United States	$	355,252	$	307,258	$	683,895	$	591,369
Canada	30,978		36,193		60,366		72,654
Europe	11,753		17,540		30,847		34,456
Pacific Rim	4,266		1,054		8,489		2,991
Latin America	35,071		13,439		67,180		20,868
Other	2,884		2,500		5,908		3,916
Intersegment revenue elimination	(668)		—		(1,063)		—
Total revenue	$	439,536	$	377,984	$	855,622	$	726,254

See Note 16 – Segment Information for disaggregation of revenue by segment.

Rental Revenue

TestEquity rents new and used electronic test and measurement equipment to customers in multiple industries. Lawson leases parts washer machines to customers. This leased equipment is included in Rental equipment, net in the Unaudited Condensed Consolidated Balance Sheets, 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 June 30, 2024 and December 31, 2023.

Rental revenue from operating leases:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue from operating leases	$	4,125	$	4,822	$	8,410	$	10,923

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Subsequent Event (Details) - Subsequent Event - Source Atlantic - USD ($) $ in Millions		3 Months Ended
	Jul. 10, 2024	Sep. 30, 2024
Subsequent Event [Line Items]
Revenue	$ 185.0
Forecast
Subsequent Event [Line Items]
Preliminary purchase price		$ 105.0

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

Note 7 – Leases

The Company leases property used for warehousing, distribution centers, office space, branch locations, equipment and vehicles. The components of lease cost were as follows (in thousands):



		Three Months Ended June 30,				Six Months Ended June 30,
Lease Type	Classification	2024		2023		2024		2023
Operating Lease Expense(1)	Operating expenses	$	6,086	$	4,519	$	11,816	$	9,399
Financing Lease Amortization	Operating expenses	136		136		265		260
Financing Lease Interest	Interest expense	26		23		49		44
Financing Lease Expense		162		159		314		304
Sublease income(2)		(106)		—		(106)		—
Net Lease Cost		$	6,142	$	4,678	$	12,024	$	9,703

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

(2) The Company subleases one of its leased properties with a remaining lease term of approximately 2 years that terminates on June 30, 2026. Sublease income is recognized on a straight-line basis over the sublease agreement and is recorded as an offset to operating lease expense.

The value of net assets and liabilities related to our operating and finance leases as of June 30, 2024 and December 31, 2023 was as follows (in thousands):


Lease Type	June 30, 2024		December 31, 2023
Total ROU operating lease assets	$	84,878	$	76,340
Total ROU financing lease assets	1,640		1,560
Total lease assets	$	86,518	$	77,900

Total current operating lease obligation	$	16,330	$	13,010
Total current financing lease obligation	547		539
Total current lease obligation	$	16,877	$	13,549

Total long-term operating lease obligation	$	72,571	$	66,234
Total long-term financing lease obligation	909		831
Total long-term lease obligation	$	73,480	$	67,065

The value of lease liabilities related to our operating and finance leases and sublease income as of June 30, 2024 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total		Sublease Income
Remaining 2024	$	10,873	$	359	$	11,232	$	315
2025	21,567		523		22,090		640
2026	17,871		429		18,300		326
2027	15,904		200		16,104		—
2028	13,915		95		14,010		—
Thereafter	35,414		16		35,430		—
Total lease payments	115,544		1,622		117,166		1,281
Less: Interest	(26,643)		(166)		(26,809)		—
Present value of lease liabilities	$	88,901	$	1,456	$	90,357	$	1,281

The weighted average lease terms and interest rates of leases held as of June 30, 2024 and December 31, 2023 were as follows:

June 30, 2024

December 31, 2023

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Weighted average remaining lease term

6.0 years

3.6 years

6.6 years

2.8 years

Weighted average interest rate

7.8%

7.4%

7.8%

7.1%

The cash outflows of leasing activity for the six months ended June 30, 2024 and 2023 were as follows (in thousands):


		Six Months Ended June 30,
Cash Flow Source	Classification	2024		2023
Operating cash flows from operating leases	Operating activities	$	(9,786)	$	(6,710)
Operating cash flows from financing leases	Operating activities	(97)		(121)
Financing cash flows from financing leases	Financing activities	(237)		(249)

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

Leases

Note 7 – Leases

The Company leases property used for warehousing, distribution centers, office space, branch locations, equipment and vehicles. The components of lease cost were as follows (in thousands):



		Three Months Ended June 30,				Six Months Ended June 30,
Lease Type	Classification	2024		2023		2024		2023
Operating Lease Expense(1)	Operating expenses	$	6,086	$	4,519	$	11,816	$	9,399
Financing Lease Amortization	Operating expenses	136		136		265		260
Financing Lease Interest	Interest expense	26		23		49		44
Financing Lease Expense		162		159		314		304
Sublease income(2)		(106)		—		(106)		—
Net Lease Cost		$	6,142	$	4,678	$	12,024	$	9,703

(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 June 30, 2024 and December 31, 2023 was as follows (in thousands):


Lease Type	June 30, 2024		December 31, 2023
Total ROU operating lease assets	$	84,878	$	76,340
Total ROU financing lease assets	1,640		1,560
Total lease assets	$	86,518	$	77,900

Total current operating lease obligation	$	16,330	$	13,010
Total current financing lease obligation	547		539
Total current lease obligation	$	16,877	$	13,549

Total long-term operating lease obligation	$	72,571	$	66,234
Total long-term financing lease obligation	909		831
Total long-term lease obligation	$	73,480	$	67,065

The value of lease liabilities related to our operating and finance leases and sublease income as of June 30, 2024 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total		Sublease Income
Remaining 2024	$	10,873	$	359	$	11,232	$	315
2025	21,567		523		22,090		640
2026	17,871		429		18,300		326
2027	15,904		200		16,104		—
2028	13,915		95		14,010		—
Thereafter	35,414		16		35,430		—
Total lease payments	115,544		1,622		117,166		1,281
Less: Interest	(26,643)		(166)		(26,809)		—
Present value of lease liabilities	$	88,901	$	1,456	$	90,357	$	1,281

The weighted average lease terms and interest rates of leases held as of June 30, 2024 and December 31, 2023 were as follows:

June 30, 2024

December 31, 2023

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Weighted average remaining lease term

6.0 years

3.6 years

6.6 years

2.8 years

Weighted average interest rate

7.8%

7.4%

7.8%

7.1%

The cash outflows of leasing activity for the six months ended June 30, 2024 and 2023 were as follows (in thousands):


		Six Months Ended June 30,
Cash Flow Source	Classification	2024		2023
Operating cash flows from operating leases	Operating activities	$	(9,786)	$	(6,710)
Operating cash flows from financing leases	Operating activities	(97)		(121)
Financing cash flows from financing leases	Financing activities	(237)		(249)

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

Leases

Note 7 – Leases

The Company leases property used for warehousing, distribution centers, office space, branch locations, equipment and vehicles. The components of lease cost were as follows (in thousands):



		Three Months Ended June 30,				Six Months Ended June 30,
Lease Type	Classification	2024		2023		2024		2023
Operating Lease Expense(1)	Operating expenses	$	6,086	$	4,519	$	11,816	$	9,399
Financing Lease Amortization	Operating expenses	136		136		265		260
Financing Lease Interest	Interest expense	26		23		49		44
Financing Lease Expense		162		159		314		304
Sublease income(2)		(106)		—		(106)		—
Net Lease Cost		$	6,142	$	4,678	$	12,024	$	9,703

(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 June 30, 2024 and December 31, 2023 was as follows (in thousands):


Lease Type	June 30, 2024		December 31, 2023
Total ROU operating lease assets	$	84,878	$	76,340
Total ROU financing lease assets	1,640		1,560
Total lease assets	$	86,518	$	77,900

Total current operating lease obligation	$	16,330	$	13,010
Total current financing lease obligation	547		539
Total current lease obligation	$	16,877	$	13,549

Total long-term operating lease obligation	$	72,571	$	66,234
Total long-term financing lease obligation	909		831
Total long-term lease obligation	$	73,480	$	67,065

The value of lease liabilities related to our operating and finance leases and sublease income as of June 30, 2024 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total		Sublease Income
Remaining 2024	$	10,873	$	359	$	11,232	$	315
2025	21,567		523		22,090		640
2026	17,871		429		18,300		326
2027	15,904		200		16,104		—
2028	13,915		95		14,010		—
Thereafter	35,414		16		35,430		—
Total lease payments	115,544		1,622		117,166		1,281
Less: Interest	(26,643)		(166)		(26,809)		—
Present value of lease liabilities	$	88,901	$	1,456	$	90,357	$	1,281

The weighted average lease terms and interest rates of leases held as of June 30, 2024 and December 31, 2023 were as follows:

June 30, 2024

December 31, 2023

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Weighted average remaining lease term

6.0 years

3.6 years

6.6 years

2.8 years

Weighted average interest rate

7.8%

7.4%

7.8%

7.1%

The cash outflows of leasing activity for the six months ended June 30, 2024 and 2023 were as follows (in thousands):


		Six Months Ended June 30,
Cash Flow Source	Classification	2024		2023
Operating cash flows from operating leases	Operating activities	$	(9,786)	$	(6,710)
Operating cash flows from financing leases	Operating activities	(97)		(121)
Financing cash flows from financing leases	Financing activities	(237)		(249)

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

Nature of Operations and Basis of Presentation	6 Months Ended
Nature of Operations and Basis of Presentation	Jun. 30, 2024
Accounting Policies [Abstract]
Nature of Operations and Basis of Presentation	Note 1 – Nature of Operations and Basis of Presentation Organization Distribution Solutions Group, Inc. (“DSG”), a Delaware corporation, is a global specialty distribution company providing value added distribution solutions to the maintenance, repair and operations (“MRO”), original equipment manufacturer (“OEM”) and industrial technology markets. DSG has three principal operating companies: Lawson Products, Inc. (“Lawson”), TestEquity Acquisition, LLC (“TestEquity”), and 301 HW Opus Holdings, Inc., conducting business as Gexpro Services (“Gexpro Services”). Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “DSG”, the “Company”, “we”, “our” or “us” refer to Distribution Solutions Group, Inc., and all entities consolidated in the accompanying unaudited condensed consolidated financial statements. Nature of Operations A summary of the nature of operations for each of DSG’s operating companies is presented below. Information regarding DSG’s reportable segments is presented in Note 16 – Segment Information. Lawson is a distributor of specialty products and services to the industrial, commercial, institutional and governmental MRO marketplace. Lawson primarily distributes MRO products to its customers through a network of sales representatives and an inside sales channel throughout the United States and Canada. TestEquity is a distributor of test and measurement equipment and solutions, industrial and electronic production supplies, vendor managed inventory programs, and converting, fabrication and adhesive solutions from its leading manufacturer partners supporting the aerospace and defense, wireless and communication, semiconductors, industrial electronics and automotive, and electronics manufacturing industries. Gexpro Services is a global supply chain solutions provider, specializing in the development of mission critical production line management, aftermarket and field installation programs. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements 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, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”). All normal recurring adjustments have been made that are necessary to fairly state the results of operations for the interim periods. Operating results for the three and six-month period ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. 2023 Stock Split: On August 15, 2023, DSG announced that its Board of Directors approved and declared a two-for-one stock split (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 have been retroactively adjusted to reflect the impact of the Stock Split for all periods presented herein. Period-end Dates: The Company and its consolidated subsidiaries, except for Gexpro Services, operate on a calendar year-end. Gexpro Services operates on a calendar year-end for annual reporting purposes. However, quarterly financial statements for Gexpro Services are prepared on financial close dates that may differ from that of the Company. For the quarter ended June 30, 2024, there was a one day difference in the period end. The consolidated financial statement impact of the one day difference arising from the different period ends for the quarter ended June 30, 2024 was not material. The Company utilizes the exchange rates in effect at Gexpro Services’ reporting date and the appropriate weighted-average rate for its fiscal reporting period.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2024
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. On October 25, 2023, Plaintiff Garfield voluntarily dismissed his appeal. The voluntary dismissal did not impact the appeal by Plaintiff Edelman, who continued to advance his appeal. The Delaware Supreme Court held a hearing on May 22, 2024 to hear arguments on the plaintiff’s appeal. On June 4, 2024, the Delaware Supreme Court ruled in favor of the Defendants and issued an order affirming the Court of Chancery’s dismissal of the complaint. At this time, all of the lawsuits filed in connection with the Mergers have been dismissed. 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 losses, 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 June 30, 2024 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 Sheets. 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.

Goodwill and Intangible Assets - Schedule of Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 399,925
Acquisitions	29,655
Impact of foreign exchange rates	(1,272)
Goodwill, ending balance	428,308
All Other
Goodwill [Roll Forward]
Goodwill, beginning balance	23,277
Acquisitions	0
Impact of foreign exchange rates	(738)
Goodwill, ending balance	22,539
Lawson \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	155,915
Acquisitions	29,765
Impact of foreign exchange rates	(198)
Goodwill, ending balance	185,482
TestEquity \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	164,990
Acquisitions	(110)
Impact of foreign exchange rates	0
Goodwill, ending balance	164,880
Gexpro Services \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	55,743
Acquisitions	0
Impact of foreign exchange rates	(336)
Goodwill, ending balance	$ 55,407

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 49
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482785/280-10-55-49

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482548/350-20-55-24

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 4: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481372/852-10-55-10

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(15))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482598/350-20-45-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(10)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

+ Details

Business Acquisitions - 2024 Acquisition (Narrative) (Details) - USD ($) $ in Thousands			5 Months Ended
	May 01, 2024	Jan. 19, 2024	Jun. 30, 2024
S&S Automotive Inc.
Business Acquisition [Line Items]
Preliminary purchase price	$ 80,000
Cash acquired from acquisition	$ 700
Expected tax deductible goodwill amount			$ 26,900
S&S Automotive Inc. \| Customer Relationships
Business Acquisition [Line Items]
Useful life (in years)			17 years
S&S Automotive Inc. \| Trade Names
Business Acquisition [Line Items]
Useful life (in years)			8 years
Safety Supply Illinois LLC
Business Acquisition [Line Items]
Preliminary purchase price		$ 9,900
Expected tax deductible goodwill amount			$ 3,000
Business acquisition (as a percent)		100.00%
Decrease to goodwill			$ 100
Safety Supply Illinois LLC \| Customer Relationships
Business Acquisition [Line Items]
Useful life (in years)			16 years
Other intangible assets, measurement period adjustments			$ 100
Safety Supply Illinois LLC \| Trade Names
Business Acquisition [Line Items]
Useful life (in years)			8 years

Debt - Schedule of Outstanding Long-Term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Line of Credit Facility [Line Items]
Total debt	$ 610,304	$ 574,676
Less: current portion of long-term debt	(31,367)	(32,551)
Total long-term debt	573,654	535,881
Line of Credit
Line of Credit Facility [Line Items]
Less: deferred financing costs	(7,300)
Line of Credit \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Less: deferred financing costs	(5,283)	(6,244)
Line of Credit \| Revolving Credit Facility \| Senior secured revolving credit facility
Line of Credit Facility [Line Items]
Total debt	45,000	0
Line of Credit \| Revolving Credit Facility \| Other revolving line of credit
Line of Credit Facility [Line Items]
Total debt	1,116	2,301
Line of Credit \| Secured Debt
Line of Credit Facility [Line Items]
Total debt	45,625	46,875
Less: deferred financing costs	(5,300)
Line of Credit \| Secured Debt \| Senior secured term loan
Line of Credit Facility [Line Items]
Total debt	225,000	228,125
Line of Credit \| Incremental term loan
Line of Credit Facility [Line Items]
Total debt	$ 293,563	$ 297,375

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

Supplemental Financial Statement Information (Tables)

6 Months Ended

Jun. 30, 2024

Condensed Financial Information Disclosure [Abstract]

Schedule of Components of Property, Plant and Equipment, Net and Rental Equipment, Net

Components of property, plant and equipment, net were as follows:



(in thousands)	June 30, 2024		December 31, 2023
Land	$	15,351	$	16,916
Buildings and improvements	49,358		50,376
Machinery and equipment	51,032		48,844
Capitalized software	11,856		9,148
Furniture and fixtures	13,020		11,022
Vehicles	3,598		1,738
Construction in progress(1)	3,415		6,025
Total	147,630		144,069
Accumulated depreciation and amortization	(38,921)		(30,258)
Property, plant and equipment, net	$	108,709	$	113,811

(1)Construction in progress primarily relates to upgrades to certain of the Company’s information technology systems and distribution facilities that we expect to place in service in the next 12 months.

Depreciation expense for property, plant and equipment and amortization expense for capitalized software, which are included in Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Depreciation expense for property, plant and equipment	$	3,771	$	2,465	$	7,500	$	6,014
Amortization expense for capitalized software	$	863	$	818	$	1,668	$	1,539

Rental equipment, net consisted of the following:



(in thousands)	June 30, 2024		December 31, 2023
Rental equipment	$	48,629	$	52,387
Accumulated depreciation	(25,567)		(27,812)
Rental equipment, net	$	23,062	$	24,575

Depreciation expense for rental equipment, which is included in Cost of goods sold in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Depreciation expense for rental equipment	$	1,695	$	1,895	$	3,465	$	4,196

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


(in thousands)	June 30, 2024		December 31, 2023
Accrued severance and acquisition related retention bonus	$	36,085	$	21,128
Accrued compensation	20,414		25,371
Accrued and withheld taxes, other than income taxes	9,703		8,661
Accrued interest	8,375		3,301
Accrued customer rebates	5,041		5,473
Accrued stock-based compensation	4,324		5,573
Accrued health benefits	1,963		1,728
Accrued income taxes	1,750		1,994
Deferred acquisition payments and accrued earnout liabilities	1,679		7,513
Deferred revenue	987		810
Other	17,795		15,689
Total accrued expenses and other current liabilities	$	108,116	$	97,241

Schedule of Other Liabilities

Other liabilities consisted of the following:


(in thousands)	June 30, 2024		December 31, 2023
Security bonus plan	$	7,938	$	8,666
Deferred compensation	11,198		11,041
Other	6,660		5,736
Total other liabilities	$	25,796	$	25,443

Business Acquisitions - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed of S&S Automotive Inc (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	May 01, 2024	Jun. 30, 2024	Jun. 30, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill		$ 428,308	$ 428,308	$ 399,925
S&S Automotive Inc.
Business Acquisition [Line Items]
Accounts receivable	$ 4,100
Inventory	7,100
Other current assets	306
Property, plant and equipment	2,351
Right of use assets	7,581
Other assets	35
Accounts payable	(1,120)
Lease liabilities	(7,604)
Accrued expenses and other liabilities	(1,989)
Goodwill	26,892
Total purchase consideration exchanged, net of cash acquired	80,052
Cash consideration	78,659
Deferred consideration	1,393
Deferred consideration transferred		$ 700	$ 700
S&S Automotive Inc. \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets	30,200
S&S Automotive Inc. \| Trade names
Business Acquisition [Line Items]
Other intangible assets	$ 12,200

Supplemental Financial Statement Information - Narrative (Details) $ in Thousands	Jun. 30, 2024 USD ($) property	Dec. 31, 2023 USD ($)	Jun. 30, 2023 USD ($)	Jun. 08, 2023 USD ($)
Condensed Financial Information Disclosure [Abstract]
Restricted cash	$ 10,125	$ 15,695	$ 20,607	$ 10,100
Escrow deposit	1,700			$ 1,700
Restricted cash as collateral for certain borrowings	$ 8,400
Number of properties held for sale \| property	2
Assets held for sale	$ 3,589	$ 0

Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
Segment Information (Details) $ in Thousands	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) segment branch	Jun. 30, 2023 USD ($)
Segment Reporting [Abstract]
Number of reportable segments \| segment			3
Number of branches \| branch			14
Segment Reporting Information [Line Items]
Revenue	$ 439,536	$ 377,984	$ 855,622	$ 726,254
Operating income (loss)	14,158	13,776	16,941	30,497
All Other
Segment Reporting Information [Line Items]
Revenue	14,471	14,496	26,966	29,112
Operating income (loss)	(765)	(290)	(1,457)	786
Intersegment revenue elimination
Segment Reporting Information [Line Items]
Revenue	(668)	0	(1,063)	0
Lawson
Segment Reporting Information [Line Items]
Revenue	121,089	119,147	239,251	244,427
Lawson \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	121,118	119,147	239,304	244,427
Operating income (loss)	6,129	8,470	10,236	16,715
Lawson \| Intersegment revenue elimination
Segment Reporting Information [Line Items]
Revenue	29	0	53	0
TestEquity
Segment Reporting Information [Line Items]
Revenue	197,446	136,067	384,511	243,425
TestEquity \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	197,481	136,067	384,630	243,425
Operating income (loss)	703	(3,182)	(5,391)	(3,156)
TestEquity \| Intersegment revenue elimination
Segment Reporting Information [Line Items]
Revenue	35	0	119	0
Gexpro Services
Segment Reporting Information [Line Items]
Revenue	106,530	108,274	204,894	209,290
Gexpro Services \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	107,134	108,274	205,785	209,290
Operating income (loss)	8,091	8,778	13,553	16,152
Gexpro Services \| Intersegment revenue elimination
Segment Reporting Information [Line Items]
Revenue	$ 604	$ 0	$ 891	$ 0

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Operating activities
Net income (loss)	$ (3,328)	$ 8,931
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization	35,587	30,306
Amortization of debt issuance costs	1,320	1,002
Stock-based compensation	1,891	4,392
Deferred income taxes	(1,541)	86
Change in fair value of earnout liabilities	3	21
(Gain) loss on sale of rental equipment	(900)	(1,377)
(Gain) loss on sale of property, plant and equipment	(5)	215
Charge for step-up of acquired inventory	634	716
Net realizable value adjustment and write-offs for obsolete and excess inventory	3,110	3,538
Bad debt expense	106	933
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(18,331)	(4,799)
Inventories	(1,636)	(2,576)
Prepaid expenses and other current assets	(15,345)	(6,405)
Accounts payable	9,771	(8,936)
Accrued expenses and other current liabilities	15,636	(624)
Other changes in operating assets and liabilities	1,037	2,041
Net cash provided by (used in) operating activities	28,009	27,464
Investing activities
Purchases of property, plant and equipment	(5,829)	(7,796)
Business acquisitions, net of cash acquired	(95,437)	(252,007)
Purchases of rental equipment	(3,214)	(5,990)
Proceeds from sale of rental equipment	2,110	2,969
Net cash provided by (used in) investing activities	(102,370)	(262,824)
Financing activities
Proceeds from revolving lines of credit	84,139	161,684
Payments on revolving lines of credit	(40,285)	(274,134)
Proceeds from term loans	0	305,000
Payments on term loans	(8,188)	(11,250)
Deferred financing costs	0	(3,419)
Proceeds from rights offering, net of offering costs of $1,531	0	98,469
Repurchase of common stock	(1,683)	0
Shares repurchased held in treasury	(538)	(171)
Payment of financing lease principal	(237)	(249)
Payment of earnout	0	(1,000)
Net cash provided by (used in) financing activities	33,208	274,930
Effect of exchange rate changes on cash and cash equivalents	(1,562)	541
Increase (decrease) in cash, cash equivalents and restricted cash	(42,715)	40,111
Cash, cash equivalents and restricted cash at beginning of period	99,626	24,740
Cash, cash equivalents and restricted cash at end of period	56,911	64,851
Cash and cash equivalents	46,786	44,244
Restricted cash	10,125	20,607
Total cash, cash equivalents and restricted cash	56,911	64,851
Supplemental disclosure of cash flow information
Net cash paid for income taxes	11,015	5,444
Net cash paid for interest	17,943	7,308
Net cash paid for interest on supply chain financing	1,334	1,026
Non-cash activities:
Additions of property, plant and equipment included in accounts payable	624	1,566
Right of use assets obtained in exchange for finance lease liabilities	383	329
Right of use assets obtained in exchange for operating lease liabilities	$ 8,849	$ 4,840

Supplemental Financial Statement Information - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Condensed Financial Information Disclosure [Abstract]
Security bonus plan	$ 7,938	$ 8,666
Deferred compensation	11,198	11,041
Other	6,660	5,736
Total other liabilities	$ 25,796	$ 25,443

Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

Note 9 – Debt

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



(in thousands)	June 30, 2024		December 31, 2023
Senior secured revolving credit facility	$	45,000	$	—
Senior secured term loan	225,000		228,125
Senior secured delayed draw term loan	45,625		46,875
Incremental term loan	293,563		297,375
Other revolving line of credit	1,116		2,301


Total debt	610,304		574,676
Less: current portion of long-term debt	(31,367)		(32,551)
Less: deferred financing costs	(5,283)		(6,244)
Total long-term debt	$	573,654	$	535,881

On June 8, 2023 and June 13, 2024, the Company and certain of its subsidiaries entered into the First Amendment to Amended and Restated Credit Agreement and the Second Amendment to Amended and Restated Credit Agreement, respectively, (the “First Amendment”, the “Second Amendment” and as amended, the “2023 Amended Credit Agreement”), which amended and replaced the previous credit agreement, dated as of April 1, 2022.

The 2023 Amended 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 Amended Credit Agreement.

Each of the loans under the 2023 Amended Credit Agreement mature on April 1, 2027. The Company is required to repay principal of approximately $7.6 million each quarter. Future maturities of long-term debt are $30.3 million per year payable in equal quarterly installments in 2024, 2025 and 2026, with the remaining balance of $526.6 million due in 2027 upon maturity.

Net of outstanding letters of credit, there was $153.0 million of borrowing availability under the revolving credit facility as of June 30, 2024.

In the second quarter of 2024, the Company entered into the Second Amendment that replaced a specified benchmark interest rate for certain loans under the 2023 Credit Agreement, whereby effective June 28, 2024, the CDOR Rate was replaced with the CORRA Rate (each as defined in the 2023 Amended Credit Agreement). The additional margin range did not change. As amended, the loans under the 2023 Amended 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 Amended 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 Amended Credit Agreement or (ii) the Adjusted Term SOFR Rate (as defined in the 2023 Amended Credit Agreement) or the CORRA Rate, 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 Amended Credit Agreement.

Deferred financing costs of $3.4 million were incurred in connection with the 2023 Amended Credit Agreement, and deferred financing costs of $4.0 million were incurred during 2022 in connection with the previous credit agreement. Deferred financing costs are amortized over the life of the debt instrument and reported as a component of Interest expense in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Amortization of deferred financing costs was $0.7 million and $1.3 million for the three and six months June 30, 2024, respectively, and $0.5 million and $1.0 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, total deferred financing costs net of accumulated amortization were $7.3 million of which $5.3 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 $2.0 million

are included in Other assets (related to the senior secured revolving credit facility) in the Unaudited Condensed Consolidated Balance Sheets.

Subject to certain exceptions as set forth in the 2023 Amended Credit Agreement, the obligations of the Company and its U.S. subsidiaries under the 2023 Amended Credit Agreement are guaranteed by the Company and certain of the Company’s U.S. subsidiaries and the obligations of each of the Company’s Canadian subsidiaries under the 2023 Amended Credit Agreement are guaranteed by the Company and certain of its U.S. and Canadian subsidiaries.

Subject to certain exceptions as set forth in the 2023 Amended Credit Agreement, the obligations under the 2023 Amended Credit Agreement are secured by a first priority security interest in and lien on substantially all assets of the Company, each other borrower and each guarantor.

The 2023 Amended 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 Amended Credit Agreement. The 2023 Amended Credit Agreement contains various events of default (subject to exceptions, thresholds and grace periods as set forth in the 2023 Amended Credit Agreement). Under certain circumstances, a default interest rate will apply on all obligations at a rate equal to 2.0% per annum above the applicable interest rate. The Company was in compliance with all financial covenants as of June 30, 2024.

- Definition

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.

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+ Details

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

3 Months Ended

6 Months Ended

Jun. 30, 2024

Jun. 30, 2023

Jun. 30, 2024

Jun. 30, 2023

Income Statement [Abstract]

Revenue

$ 439,536

$ 377,984

$ 855,622

$ 726,254

Cost of goods sold

288,009

241,961

560,686

457,360

Gross profit

151,527

136,023

294,936

268,894

Selling, general and administrative expenses

137,369

122,247

277,995

238,397

Operating income (loss)

14,158

13,776

16,941

30,497

Interest expense

(12,793)

(9,492)

(24,620)

(17,162)

Change in fair value of earnout liabilities

(8)

(3)

(21)

Other income (expense), net

359

(761)

(1,736)

Income (loss) before income taxes

1,716

3,559

(7,585)

11,578

Income tax expense (benefit)

(180)

535

(4,257)

2,647

Net income (loss)

$ 1,896

$ 3,024

$ (3,328)

$ 8,931

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

^[1]

$ 0.04

$ 0.07

$ (0.07)

$ 0.21

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

^[1]

$ 0.04

$ 0.07

$ (0.07)

$ 0.21

Comprehensive income (loss)

Net income (loss)

$ 1,896

$ 3,024

$ (3,328)

$ 8,931

Foreign currency translation adjustment

(2,558)

1,083

(5,696)

3,707

Other

(385)

(585)

Comprehensive income (loss)

$ (662)

$ 3,722

$ (9,024)

$ 12,053

[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.

Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Outstanding Long-Term Debt

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



(in thousands)	June 30, 2024		December 31, 2023
Senior secured revolving credit facility	$	45,000	$	—
Senior secured term loan	225,000		228,125
Senior secured delayed draw term loan	45,625		46,875
Incremental term loan	293,563		297,375
Other revolving line of credit	1,116		2,301


Total debt	610,304		574,676
Less: current portion of long-term debt	(31,367)		(32,551)
Less: deferred financing costs	(5,283)		(6,244)
Total long-term debt	$	573,654	$	535,881

- Definition

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.

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+ Details

Supplemental Financial Statement Information

6 Months Ended

Jun. 30, 2024

Condensed Financial Information Disclosure [Abstract]

Supplemental Financial Statement Information

Note 5 – Supplemental Financial Statement Information

Restricted Cash

The Company has agreed to maintain restricted cash of $10.1 million under agreements with outside parties. Escrow accounts of $1.7 million were established in conjunction with certain business acquisitions, to be released upon meeting certain working capital and other post-closing requirements as of the one-year post-acquisition dates with a balance of $1.7 million at June 30, 2024. The Company is restricted from withdrawing this balance without the prior consent of the sellers. The remaining restricted cash balance of $8.4 million represents collateral for certain borrowings under the 2023 Amended Credit Agreement, and the Company is restricted from withdrawing this balance without the prior consent of the respective lenders.

Assets Held for Sale

During the second quarter of 2024, subsidiaries of the Company within the TestEquity and Lawson Products segments committed to a plan to sell two of their properties. As of June 30, 2024, $3.6 million has been classified as Assets held for sale within the Condensed Consolidated Balance Sheets. This amount represents the current carrying value of the assets. No gain or loss has been recognized as the carrying amount is less than the anticipated fair value expected to be received upon sale. The sale is expected to be completed within the next twelve months.

Property, Plant and Equipment, net

Components of property, plant and equipment, net were as follows:



(in thousands)	June 30, 2024		December 31, 2023
Land	$	15,351	$	16,916
Buildings and improvements	49,358		50,376
Machinery and equipment	51,032		48,844
Capitalized software	11,856		9,148
Furniture and fixtures	13,020		11,022
Vehicles	3,598		1,738
Construction in progress(1)	3,415		6,025
Total	147,630		144,069
Accumulated depreciation and amortization	(38,921)		(30,258)
Property, plant and equipment, net	$	108,709	$	113,811


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Depreciation expense for property, plant and equipment	$	3,771	$	2,465	$	7,500	$	6,014
Amortization expense for capitalized software	$	863	$	818	$	1,668	$	1,539

Rental Equipment, net

Rental equipment, net consisted of the following:



(in thousands)	June 30, 2024		December 31, 2023
Rental equipment	$	48,629	$	52,387
Accumulated depreciation	(25,567)		(27,812)
Rental equipment, net	$	23,062	$	24,575

Depreciation expense for rental equipment, which is included in Cost of goods sold in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Depreciation expense for rental equipment	$	1,695	$	1,895	$	3,465	$	4,196

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)	June 30, 2024		December 31, 2023
Accrued severance and acquisition related retention bonus	$	36,085	$	21,128
Accrued compensation	20,414		25,371
Accrued and withheld taxes, other than income taxes	9,703		8,661
Accrued interest	8,375		3,301
Accrued customer rebates	5,041		5,473
Accrued stock-based compensation	4,324		5,573
Accrued health benefits	1,963		1,728
Accrued income taxes	1,750		1,994
Deferred acquisition payments and accrued earnout liabilities	1,679		7,513
Deferred revenue	987		810
Other	17,795		15,689
Total accrued expenses and other current liabilities	$	108,116	$	97,241

Other Liabilities

Other liabilities consisted of the following:


(in thousands)	June 30, 2024		December 31, 2023
Security bonus plan	$	7,938	$	8,666
Deferred compensation	11,198		11,041
Other	6,660		5,736
Total other liabilities	$	25,796	$	25,443

Earnout Liabilities	6 Months Ended
Earnout Liabilities	Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Earnout Liabilities	Note 8 – Earnout Liabilities Hisco Acquisition The Hisco Transaction included a potential earn-out payment of up to $12.6 million, subject to Hisco achieving certain performance targets. The earn-out payment was to be calculated based on the gross profit of Hisco and its affiliates for the twelve months ended October 31, 2023, subject to certain adjustments and exclusions set forth in the Purchase Agreement. The fair value of the contingent consideration arrangement was classified as a Level 3 instrument and was determined using a probability-based scenario analysis approach. As of June 8, 2023 (the Hisco Transaction date) and December 31, 2023, the fair value of the earn-out was $0.1 million and $0.0 million, respectively, with amounts recorded in Accrued expenses and other current liabilities in the Unaudited Condensed Consolidated Balance Sheets. As the performance targets were not achieved, no earn-out payment was made. Frontier Acquisition On March 31, 2022, Gexpro Services acquired Frontier Technologies Brewton, LLC and Frontier Engineering and Manufacturing Technologies, Inc. ("Frontier"). The consideration for the Frontier acquisition includes a potential earn-out payment of up to $3.0 million based upon the achievement of certain milestones and relative thresholds during the earn-out measurement period, which ends on December 31, 2024, with payments made annually beginning in 2023 and ending in 2025. During the first quarter of 2023, a $1.0 million earn-out payment was made based on the achievement of certain milestones in 2022. The fair value of the contingent consideration arrangement was classified as a Level 3 instrument and was determined using a probability-based scenario analysis approach. As of March 31, 2022 (the Frontier acquisition date), December 31, 2023 and June 30, 2024, the fair value of the earn-out was $0.9 million, $0.0 million and $0.0 million, respectively, with amounts recorded in Accrued expenses and other current liabilities in the Unaudited Condensed Consolidated Balance Sheets.

Business Acquisitions (Tables)

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed, including the allocation to other intangible assets acquired:


	S&S Automotive
(in thousands)	May 1, 2024 Acquisition Date
Accounts receivable	$	4,100
Inventory	7,100
Other current assets	306
Property, plant and equipment	2,351
Right of use assets	7,581
Other intangible assets:
Customer relationships	30,200
Trade names	12,200

Other assets	35
Accounts payable	(1,120)
Lease liabilities	(7,604)
Accrued expenses and other liabilities	(1,989)
Goodwill	26,892
Total purchase consideration exchanged, net of cash acquired	$	80,052
Cash consideration	$	78,659
Deferred consideration(1)	1,393
Total purchase consideration exchanged, net of cash acquired	$	80,052

(1) The Company paid $0.7 million of the S&S Automotive deferred consideration during the three and six months ended June 30, 2024.


	Emergent Safety Supply
(in thousands)	January 19, 2024 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable	$	1,363	$	—	$	1,363
Inventory	1,399		—		1,399
Other current assets	10		—		10
Property, plant and equipment	228		—		228
Right of use assets	550		—		550
Other intangible assets:
Customer relationships	2,700		100		2,800
Trade names	1,400		—		1,400

Other assets	11		—		11
Accounts payable	(205)		—		(205)
Lease liabilities	(550)		—		(550)
Accrued expenses and other liabilities	(25)		—		(25)
Goodwill	2,973		(100)		2,873
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854
Cash consideration	$	8,904	$	—	$	8,904
Deferred consideration	950		—		950
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854

The following table summarizes the allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed, including the allocation to other intangible assets acquired:


	Hisco
(in thousands)	June 8, 2023 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable(1)	$	66,792	$	(2,269)	$	64,523
Inventory	61,300		(645)		60,655
Other current assets	3,858		350		4,208
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		(1,800)		40,000
Trade names	25,600		(300)		25,300

Deferred tax liability, net of deferred tax asset	(2,544)		81		(2,463)
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)		(289)		(9,250)

Goodwill	49,718		122		49,840
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156
Cash consideration	$	252,007	$	—	$	252,007
Deferred consideration(2)	12,418		2,631		15,049
Contingent consideration	6,000		(5,900)		100
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156

(1) Accounts receivable had an estimated fair value of $64.5 million and a gross contractual value of $66.8 million. The difference represents the Company’s best estimate of the contractual cash flows that will not be collected.

(2) The Company paid $3.0 million and $7.2 million of the Hisco deferred consideration during the three and six months ended June 30, 2024, respectively and $7.8 million during 2023. As of June 30, 2024, there is no deferred consideration remaining.

Schedule of Unaudited Pro Forma Information and Actual Results of Business Acquisitions

The following table presents estimated unaudited pro forma consolidated financial information for DSG as if the acquisitions disclosed above occurred on January 1, 2023, for the acquisitions completed during 2024 and January 1, 2022 for the acquisition completed during 2023. The unaudited pro forma information reflects adjustments including amortization on acquired intangible assets, interest expense, and the related tax effects. This information is presented for informational purposes only and is not necessarily indicative of future results or the results that would have occurred had the acquisitions been completed on the date indicated.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	443,067	$	469,269	$	869,217	$	935,205


Net income	$	191	$	4,233	$	(5,476)	$	6,606

The following table presents actual results attributable to our acquisitions that were included in the unaudited condensed consolidated financial statements for the second quarter and first six months of 2024 and 2023. The results for these acquisitions are only included subsequent to their respective acquisition dates provided above.


	Three Months Ended March 31,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	10,112	$	28,001	$	12,401	$	28,001
Net Income	$	(467)	$	(865)	$	(411)	$	(865)

Segment Information

6 Months Ended

Jun. 30, 2024

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 governmental MRO marketplace. Lawson primarily distributes MRO products to its customers through a network of sales representatives and an inside sales channel throughout the United States and Canada.

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

Gexpro Services is a global supply chain solutions provider, specializing in the development of mission critical production line management, aftermarket and field installation programs.

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 segments and reconciliations of that information to the unaudited condensed consolidated financial statements 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 June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue
Lawson	$	121,118	$	119,147	$	239,304	$	244,427
TestEquity	197,481		136,067		384,630		243,425
Gexpro Services	107,134		108,274		205,785		209,290
All Other	14,471		14,496		26,966		29,112
Intersegment revenue elimination	(668)		—		(1,063)		—
Total revenue	$	439,536	$	377,984	$	855,622	$	726,254

Operating income (loss)
Lawson	$	6,129	$	8,470	$	10,236	$	16,715
TestEquity	703		(3,182)		(5,391)		(3,156)
Gexpro Services	8,091		8,778		13,553		16,152
All Other	(765)		(290)		(1,457)		786
Total operating income (loss)	$	14,158	$	13,776	$	16,941	$	30,497

Segment revenue includes revenue from sales to external customers and intersegment revenue from sales transactions between segments. The Company accounts for intersegment sales similar to third party transactions that are conducted on an arm’s-length basis and reflect current market prices. Intersegment revenue is eliminated in consolidation. Segment revenue and the elimination of intersegment revenue was as follows:



(in thousands)	Lawson		TestEquity		Gexpro Services		All Other		Elimination		Total
Three Months Ended June 30, 2024
Revenue from external customers	$	121,089	$	197,446	$	106,530	$	14,471	$	—	$	439,536
Intersegment revenue	29		35		604		—		(668)		—
Revenue	$	121,118	$	197,481	$	107,134	$	14,471	$	(668)	$	439,536
Three Months Ended June 30, 2023
Revenue from external customers	$	119,147	$	136,067	$	108,274	$	14,496	$	—	$	377,984
Intersegment revenue	—		—		—		—		—		—
Revenue	$	119,147	$	136,067	$	108,274	$	14,496	$	—	$	377,984

Six Months Ended June 30, 2024
Revenue from external customers	$	239,251	$	384,511	$	204,894	$	26,966	$	—	$	855,622
Intersegment revenue	53		119		891		—		(1,063)		—
Revenue	$	239,304	$	384,630	$	205,785	$	26,966	$	(1,063)	$	855,622
Six Months Ended June 30, 2023
Revenue from external customers	$	244,427	$	243,425	$	209,290	$	29,112			$	726,254
Intersegment revenue	—		—		—		—		—		—
Revenue	$	244,427	$	243,425	$	209,290	$	29,112	$	—	$	726,254

- Definition

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.

+ References

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+ Details

Supplemental Financial Statement Information - Schedule of Depreciation Expense for Rental Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Rental Equipment
Property, Plant and Equipment [Line Items]
Depreciation expense for rental equipment	$ 1,695	$ 1,895	$ 3,465	$ 4,196

Business Acquisitions - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed of HIS Company, Inc. (Details) - USD ($)		3 Months Ended	6 Months Ended	12 Months Ended		13 Months Ended
	Jun. 08, 2023	Jun. 30, 2024	Jun. 30, 2024	Jun. 08, 2024	Dec. 31, 2023	Jun. 30, 2024
Business Acquisition [Line Items]
Goodwill		$ 428,308,000	$ 428,308,000		$ 399,925,000	$ 428,308,000
Hisco
Business Acquisition [Line Items]
Accounts receivable	$ 66,792,000	64,523,000	64,523,000			64,523,000
Accounts receivable, measurement period adjustments						(2,269,000)
Inventory	61,300,000	60,655,000	60,655,000			60,655,000
Inventory, measurement period adjustments						(645,000)
Other current assets	3,858,000	4,208,000	4,208,000			4,208,000
Other current assets, measurement period adjustments						350,000
Property, plant and equipment	48,326,000	48,326,000	48,326,000			48,326,000
Right of use assets	21,102,000	22,290,000	22,290,000			22,290,000
Right of use assets, measurement period adjustments						1,188,000
Deferred tax liability, net of deferred tax asset	(2,544,000)	(2,463,000)	(2,463,000)			(2,463,000)
Deferred tax liability, net of deferred tax asset, measurement period adjustments						81,000
Other assets	2,495,000	2,495,000	2,495,000			2,495,000
Accounts payable	(16,689,000)	(16,689,000)	(16,689,000)			(16,689,000)
Lease liabilities	(22,372,000)	(22,079,000)	(22,079,000)			(22,079,000)
Lease liabilities, measurement period adjustments						293,000
Accrued expenses and other liabilities	(8,961,000)	(9,250,000)	(9,250,000)			(9,250,000)
Accrued expenses and other liabilities, measurement period adjustments						(289,000)
Goodwill	49,718,000	49,840,000	49,840,000			49,840,000
Goodwill, measurement period adjustments				$ 100,000		122,000
Total purchase consideration exchanged, net of cash acquired	270,425,000	267,156,000	267,156,000			267,156,000
Total purchase consideration exchanged, net of cash acquired, measurement period adjustments				$ (3,300,000)		(3,269,000)
Cash consideration	252,007,000					252,007,000
Deferred consideration	12,418,000		0			15,049,000
Deferred consideration, measurement period adjustments						2,631,000
Contingent consideration	6,000,000					100,000
Contingent consideration, measurement period adjustments						(5,900,000)
Deferred consideration transferred		3,000,000	7,200,000		$ 7,800,000
Hisco \| Customer relationships
Business Acquisition [Line Items]
Other intangible assets	41,800,000	40,000,000	40,000,000			40,000,000
Other intangible assets, measurement period adjustments						(1,800,000)
Hisco \| Trade names
Business Acquisition [Line Items]
Other intangible assets	$ 25,600,000	$ 25,300,000	$ 25,300,000			25,300,000
Other intangible assets, measurement period adjustments						$ (300,000)

Segment Information (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Financial Information of Reportable Segments


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue
Lawson	$	121,118	$	119,147	$	239,304	$	244,427
TestEquity	197,481		136,067		384,630		243,425
Gexpro Services	107,134		108,274		205,785		209,290
All Other	14,471		14,496		26,966		29,112
Intersegment revenue elimination	(668)		—		(1,063)		—
Total revenue	$	439,536	$	377,984	$	855,622	$	726,254

Operating income (loss)
Lawson	$	6,129	$	8,470	$	10,236	$	16,715
TestEquity	703		(3,182)		(5,391)		(3,156)
Gexpro Services	8,091		8,778		13,553		16,152
All Other	(765)		(290)		(1,457)		786
Total operating income (loss)	$	14,158	$	13,776	$	16,941	$	30,497

Intersegment revenue is eliminated in consolidation. Segment revenue and the elimination of intersegment revenue was as follows:



(in thousands)	Lawson		TestEquity		Gexpro Services		All Other		Elimination		Total
Three Months Ended June 30, 2024
Revenue from external customers	$	121,089	$	197,446	$	106,530	$	14,471	$	—	$	439,536
Intersegment revenue	29		35		604		—		(668)		—
Revenue	$	121,118	$	197,481	$	107,134	$	14,471	$	(668)	$	439,536
Three Months Ended June 30, 2023
Revenue from external customers	$	119,147	$	136,067	$	108,274	$	14,496	$	—	$	377,984
Intersegment revenue	—		—		—		—		—		—
Revenue	$	119,147	$	136,067	$	108,274	$	14,496	$	—	$	377,984

Six Months Ended June 30, 2024
Revenue from external customers	$	239,251	$	384,511	$	204,894	$	26,966	$	—	$	855,622
Intersegment revenue	53		119		891		—		(1,063)		—
Revenue	$	239,304	$	384,630	$	205,785	$	26,966	$	(1,063)	$	855,622
Six Months Ended June 30, 2023
Revenue from external customers	$	244,427	$	243,425	$	209,290	$	29,112			$	726,254
Intersegment revenue	—		—		—		—		—		—
Revenue	$	244,427	$	243,425	$	209,290	$	29,112	$	—	$	726,254

Supplemental Financial Statement Information - Schedule of Rental Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Rental equipment, net	$ 23,062	$ 24,575
Rental Equipment
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Rental equipment	48,629	52,387
Accumulated depreciation	(25,567)	(27,812)
Rental equipment, net	$ 23,062	$ 24,575

Subsequent Event	6 Months Ended
Subsequent Event	Jun. 30, 2024
Subsequent Events [Abstract]
Subsequent Event	Note 17 – Subsequent Event On July 10, 2024, DSG announced that it signed an agreement to acquire Source Atlantic Limited (“Source Atlantic”). The transaction is expected to close in the third quarter of 2024, subject to regulatory approval and customary closing conditions, for a purchase price of approximately $105.0 million. Source Atlantic, headquartered in Saint John, New Brunswick, Canada, is an industry-leading wholesale distributor of industrial MRO supplies, safety products, fasteners, and related value-add services for the Canadian MRO market. Source Atlantic generated sales of approximately $185.0 million during its most recent fiscal year. The acquisition of Source Atlantic is intended to expand DSG’s operating footprint in the Canadian market. The acquisition will be funded using DSG’s cash on hand and its revolving credit facility.

Supplemental Financial Statement Information - Schedule of Components of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total	$ 147,630	$ 144,069
Accumulated depreciation and amortization	(38,921)	(30,258)
Property, plant and equipment, net	108,709	113,811
Land
Property, Plant and Equipment [Line Items]
Total	15,351	16,916
Buildings and improvements
Property, Plant and Equipment [Line Items]
Total	49,358	50,376
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total	51,032	48,844
Capitalized software
Property, Plant and Equipment [Line Items]
Total	11,856	9,148
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total	13,020	11,022
Vehicles
Property, Plant and Equipment [Line Items]
Total	3,598	1,738
Construction in progress
Property, Plant and Equipment [Line Items]
Total	$ 3,415	$ 6,025

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements 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, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”). All normal recurring adjustments have been made that are necessary to fairly state the results of operations for the interim periods.
Recent Accounting Pronouncements - Not Yet Adopted	Recent Accounting Pronouncements - Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The pronouncement is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption will have on its financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to require greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. The pronouncement is effective on a prospective basis for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the adoption on its financial statement disclosures.

Earnout Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
Earnout Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Jun. 30, 2024	Dec. 31, 2023	Jun. 08, 2023	Mar. 31, 2022
Hisco
Business Acquisition [Line Items]
Fair value of earn-out liability			$ 0.0	$ 0.1
Frontier
Business Acquisition [Line Items]
Fair value of earn-out liability		$ 0.0	$ 0.0		$ 0.9
Earn-out payments	$ 1.0
Maximum \| Hisco
Business Acquisition [Line Items]
Fair value of earn-out liability				$ 12.6
Maximum \| Frontier
Business Acquisition [Line Items]
Fair value of earn-out liability					$ 3.0

Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in the Carrying Amount of Goodwill by Segment

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, 2023	$	155,915	$	164,990	$	55,743	$	23,277	$	399,925
Acquisitions(1)	29,765		(110)		—		—		29,655
Impact of foreign exchange rates	(198)		—		(336)		(738)		(1,272)
Balance at June 30, 2024	$	185,482	$	164,880	$	55,407	$	22,539	$	428,308

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

Schedule of Gross Carrying Amount and Accumulated Amortization for Definite-Lived Intangible Assets

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



	June 30, 2024						December 31, 2023
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	131,141	$	(37,281)	$	93,860	$	117,881	$	(30,093)	$	87,788
Customer relationships	265,825		(85,551)		180,274		233,513		(71,215)		162,298
Other (1)	8,295		(5,533)		2,762		8,011		(4,263)		3,748
Total	$	405,261	$	(128,365)	$	276,896	$	359,405	$	(105,571)	$	253,834

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

Amortization expense for definite-lived intangible assets is included in Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Amortization expense for intangible assets	$	12,206	$	9,406	$	22,954	$	18,557

Schedule of Estimated Aggregate Amortization Expense

The estimated aggregate amortization expense for the remaining year 2024 and each of the next four years and thereafter are as follows:


(in thousands)	Amortization
Remaining 2024	$	24,453
2025	44,838
2026	41,321
2027	36,016
2028	31,525
Thereafter	98,743

Total	$	276,896

- Definition

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

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+ Details

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net income (loss)	$ 1,896	$ (5,224)	$ 3,024	$ 5,907	$ (3,328)	$ 8,931

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Note 13 – Income Taxes The Company recorded an income tax benefit of $0.2 million, a (10.5)% effective tax rate for the three months ended June 30, 2024. Income tax expense of $0.5 million, a 15.0% effective tax rate was recorded for the three months ended June 30, 2023. The effective tax rate for the three months ended June 30, 2024 was lower than the U.S. statutory rate primarily due to discrete items recorded during the quarter and a change in valuation allowances related to interest expense limitation deferred tax assets. The effective tax rate for the three months ended June 30, 2023 was lower than the U.S. statutory rate primarily due to the release of a reserve for an uncertain tax benefit during the quarter. The Company recorded an income tax benefit of $4.3 million, a 56.1% effective tax rate for the six months ended June 30, 2024. Income tax expense of $2.6 million, a 22.9% effective tax rate was recorded for the six months ended June 30, 2023. The effective tax rate for the six months ended June 30, 2024 was higher than the U.S. statutory rate primarily due to state taxes, foreign income and a change in valuation allowances related to interest expense limitation deferred tax assets. The effective tax rate for the six months ended June 30, 2023 was slightly 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 during the second quarter of 2023. 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 June 30, 2024, the Company is subject to U.S. federal income tax examinations for the years 2020 through 2022 and income tax examinations from various other jurisdictions for the years 2016 through 2023. 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.

- Definition

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+ Details

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Note 15 – Related Party Transactions Consulting Services Individuals employed by LKCM Headwater Operations, LLC, a related party of LKCM, have provided the Company with certain consulting services for interim executive management in addition to assisting in identifying cost savings, revenue enhancements and operational synergies of the combined companies. Expense of $0.3 million and $0.7 million for the three and six months ended June 30, 2024, respectively, and $0.0 million and $0.1 million for the three and six months ended June 30, 2023, respectively, was recorded within Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), reflecting expenses incurred for these consulting services. Significant Shareholder LKCM, 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, beneficially owned in the aggregate approximately 36,357,588 shares of DSG common stock as of June 30, 2024 representing approximately 77.7% of the outstanding shares of DSG common stock as of June 30, 2024. Leased Properties In connection with the Company’s headquarters move to Fort Worth, Texas in 2023, the Company has been utilizing office space in a building that is leased by LKCM. The Company is not charged any rent or other amounts for the use of the office space. 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.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

+ Details

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands

Total

Common Stock

Capital in Excess of Par Value

Retained Deficit

Treasury Stock

Accumulated Other Comprehensive Income (Loss)

Beginning balance (in shares) at Dec. 31, 2022

^[1]

38,833,568

Beginning balance at Dec. 31, 2022

$ 562,995

$ 38,834

^[1]

$ 572,379

^[1]

$ (25,736)

$ (12,526)

$ (9,956)

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

Net income (loss)

5,907

Foreign currency translation adjustment

2,624

Stock-based compensation

773

^[1]

Stock-based compensation liability paid in shares

227

^[1]

Shares issued (in shares)

^[1]

22,288

Shares issued

$ 22

^[1]

(22)

^[1]

Shares issued - earnout (in shares)

^[1]

3,400,000

Shares issued - earnout

$ 3,400

^[1]

(3,400)

^[1]

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)

Other

204

^[1]

(4)

(200)

Ending balance (in shares) at Mar. 31, 2023

^[1]

42,250,578

Ending balance at Mar. 31, 2023

572,409

$ 42,251

^[1]

570,166

^[1]

(19,833)

(12,643)

(7,532)

Beginning balance (in shares) at Dec. 31, 2022

^[1]

38,833,568

Beginning balance at Dec. 31, 2022

562,995

$ 38,834

^[1]

572,379

^[1]

(25,736)

(12,526)

(9,956)

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

Net income (loss)

8,931

Foreign currency translation adjustment

$ 3,707

Repurchase of common stock (in shares)

Ending balance (in shares) at Jun. 30, 2023

^[1]

46,699,470

Ending balance at Jun. 30, 2023

$ 675,993

$ 46,700

^[1]

665,633

^[1]

(16,809)

(12,697)

(6,834)

Beginning balance (in shares) at Mar. 31, 2023

^[1]

42,250,578

Beginning balance at Mar. 31, 2023

572,409

$ 42,251

^[1]

570,166

^[1]

(19,833)

(12,643)

(7,532)

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

Net income (loss)

3,024

Foreign currency translation adjustment

1,083

Stock-based compensation

1,062

^[1]

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

^[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]

Shares issued (in shares)

^[1]

6,672

Shares issued

$ 7

^[1]

(7)

^[1]

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

^[1]

(2,224)

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

(54)

$ (2)

^[1]

(54)

Other

385

^[1]

(385)

Ending balance (in shares) at Jun. 30, 2023

^[1]

46,699,470

Ending balance at Jun. 30, 2023

$ 675,993

$ 46,700

^[1]

665,633

^[1]

(16,809)

(12,697)

(6,834)

Beginning balance (in shares) at Dec. 31, 2023

46,758,359

Beginning balance at Dec. 31, 2023

$ 661,601

$ 46,758

671,154

(34,707)

(16,434)

(5,170)

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

Net income (loss)

(5,224)

Foreign currency translation adjustment

(3,138)

Stock-based compensation

998

Stock-based compensation liability paid in shares

870

Shares issued (in shares)

62,246

Shares issued

$ 0

$ 62

(62)

Repurchase of common stock (in shares)

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

(14,032)

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

$ (449)

$ (14)

(449)

Ending balance (in shares) at Mar. 31, 2024

46,806,573

Ending balance at Mar. 31, 2024

$ 654,658

$ 46,806

672,974

(39,931)

(16,883)

(8,308)

Beginning balance (in shares) at Dec. 31, 2023

46,758,359

Beginning balance at Dec. 31, 2023

$ 661,601

$ 46,758

671,154

(34,707)

(16,434)

(5,170)

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

Net income (loss)

(3,328)

Foreign currency translation adjustment

$ (5,696)

Ending balance (in shares) at Jun. 30, 2024

46,787,160

Ending balance at Jun. 30, 2024

$ 653,304

$ 46,786

674,074

(38,035)

(18,655)

(10,866)

Beginning balance (in shares) at Mar. 31, 2024

46,806,573

Beginning balance at Mar. 31, 2024

654,658

$ 46,806

672,974

(39,931)

(16,883)

(8,308)

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

Net income (loss)

1,896

Foreign currency translation adjustment

(2,558)

Stock-based compensation

1,080

Shares issued (in shares)

38,992

Shares issued

$ 0

$ 39

(39)

Repurchase of common stock (in shares)

(55,844)

Repurchases of common stock

$ (1,683)

$ (56)

(1,683)

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

(2,561)

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

$ (89)

$ (3)

(89)

Ending balance (in shares) at Jun. 30, 2024

46,787,160

Ending balance at Jun. 30, 2024

$ 653,304

$ 46,786

$ 674,074

$ (38,035)

$ (18,655)

$ (10,866)

[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

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

3 Months Ended

6 Months Ended

Jun. 30, 2024

Mar. 31, 2024

Jun. 30, 2023

Mar. 31, 2023

Jun. 30, 2024

Jun. 30, 2023

Basic income per share:

Net income (loss)

$ 1,896

$ (5,224)

$ 3,024

$ 5,907

$ (3,328)

$ 8,931

Basic weighted average shares outstanding (in shares)

46,818,932

43,621,236

46,798,055

42,935,198

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

^[1]

$ 0.04

$ 0.07

$ (0.07)

$ 0.21

Diluted income per share:

Net income (loss)

$ 1,896

$ (5,224)

$ 3,024

$ 5,907

$ (3,328)

$ 8,931

Basic weighted average shares outstanding (in shares)

46,818,932

43,621,236

46,798,055

42,935,198

Effect of dilutive securities (in shares)

804,780

373,778

370,020

Diluted weighted average shares outstanding (in shares)

47,623,712

43,995,014

46,798,055

43,305,218

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

^[1]

$ 0.04

$ 0.07

$ (0.07)

$ 0.21

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

289

1,564

844,374

12,002

[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.

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Allowance for doubtful accounts	$ 1,959	$ 2,120
LIABILITIES AND STOCKHOLDERS’ EQUITY
Preferred stock, par value (in USD per share)	$ 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)	$ 1	$ 1
Common stock, shares authorized (in shares)	70,000,000	70,000,000
Common stock, shares issued (in shares)	47,636,856	47,535,618
Common stock, shares outstanding (in shares)	46,787,160	46,758,359
Treasury stock (in shares)	849,696	777,259

Stock-Based Compensation	6 Months Ended
Stock-Based Compensation	Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Note 10 – Stock-Based Compensation The Company recorded a stock-based compensation benefit of $0.3 million and expense of $1.9 million for the three and six months ended June 30, 2024, respectively, and expense of $2.2 million and $4.4 million for the three and six months ended June 30, 2023, respectively, in Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). 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 $4.3 million as of June 30, 2024 and $5.6 million as of December 31, 2023 was included in Accrued expenses and other current liabilities in the Unaudited Condensed Consolidated Balance Sheets. Restricted Stock Awards During the quarter ended June 30, 2024, the Company issued approximately 117,000 Restricted stock awards ("RSAs") that vest over one to five years from the grant date with a grant date fair value of $3.8 million. Upon vesting, the vested RSAs are exchanged for an equal number of shares of the Company’s common stock. The participants have no voting or dividend rights with the RSAs. The RSAs are valued at the closing price of the DSG common stock on the date of grant and the expense is recorded ratably over the vesting period.

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

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, 2023	$	155,915	$	164,990	$	55,743	$	23,277	$	399,925
Acquisitions(1)	29,765		(110)		—		—		29,655
Impact of foreign exchange rates	(198)		—		(336)		(738)		(1,272)
Balance at June 30, 2024	$	185,482	$	164,880	$	55,407	$	22,539	$	428,308

(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:



	June 30, 2024						December 31, 2023
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	131,141	$	(37,281)	$	93,860	$	117,881	$	(30,093)	$	87,788
Customer relationships	265,825		(85,551)		180,274		233,513		(71,215)		162,298
Other (1)	8,295		(5,533)		2,762		8,011		(4,263)		3,748
Total	$	405,261	$	(128,365)	$	276,896	$	359,405	$	(105,571)	$	253,834

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Amortization expense for intangible assets	$	12,206	$	9,406	$	22,954	$	18,557

The estimated aggregate amortization expense for the remaining year 2024 and each of the next four years and thereafter are as follows:


(in thousands)	Amortization
Remaining 2024	$	24,453
2025	44,838
2026	41,321
2027	36,016
2028	31,525
Thereafter	98,743

Total	$	276,896

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 46,786	$ 83,931
Restricted cash	10,125	15,695
Accounts receivable, less allowances of $1,959 and $2,120, respectively	235,802	213,448
Inventories	320,748	315,984
Prepaid expenses and other current assets	43,306	28,272
Assets held for sale	3,589	0
Total current assets	660,356	657,330
Property, plant and equipment, net	108,709	113,811
Rental equipment, net	23,062	24,575
Goodwill	428,308	399,925
Deferred tax asset, net	84	95
Intangible assets, net	276,896	253,834
Cash value of life insurance	19,312	18,493
Right of use operating lease assets	84,878	76,340
Other assets	5,947	5,928
Total assets	1,607,552	1,550,331
Current liabilities:
Accounts payable	108,184	98,674
Current portion of long-term debt	31,367	32,551
Current portion of lease liabilities	16,877	13,549
Accrued expenses and other current liabilities	108,116	97,241
Total current liabilities	264,544	242,015
Long-term debt, less current portion, net	573,654	535,881
Lease liabilities	73,480	67,065
Deferred tax liability, net	16,774	18,326
Other liabilities	25,796	25,443
Total liabilities	954,248	888,730
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, $1 par value: Authorized - 500,000 shares, issued and outstanding — None	0	0
Common stock, $1 par value: Authorized - 70,000,000 shares Issued - 47,636,856 and 47,535,618 shares, respectively Outstanding - 46,787,160 and 46,758,359 shares, respectively	46,786	46,758
Capital in excess of par value	674,074	671,154
Retained deficit	(38,035)	(34,707)
Treasury stock – 849,696 and 777,259 shares, respectively	(18,655)	(16,434)
Accumulated other comprehensive income (loss)	(10,866)	(5,170)
Total stockholders’ equity	653,304	661,601
Total liabilities and stockholders’ equity	$ 1,607,552	$ 1,550,331

Commitments and Contingencies (Details) $ in Millions	Mar. 16, 2022 lawsuit	Jun. 30, 2024 USD ($)	Feb. 28, 2022 stockholder
Loss Contingencies [Line Items]
Accrued environmental matter costs \| $		$ 0.1
Merger Litigation
Loss Contingencies [Line Items]
Number of purported stockholders \| stockholder			3
Merger Litigation \| Robert Garfield v. Lawson Products, Inc., Case No. 2022-0252
Loss Contingencies [Line Items]
Number of claims \| lawsuit	1

- Definition

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.

+ References + Details

Supplemental Financial Statement Information - Schedule of Depreciation Expense for Property, Plant and Equipment and Amortization Expense (Details) - Property, Plant and Equipment, Excluding Rental Equipment - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property, Plant and Equipment [Line Items]
Depreciation expense for property, plant and equipment	$ 3,771	$ 2,465	$ 7,500	$ 6,014
Amortization expense for capitalized software	$ 863	$ 818	$ 1,668	$ 1,539

Goodwill and Intangible Assets - Schedule of Gross Carrying Amount and Accumulated Amortization for Definite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 405,261		$ 405,261		$ 359,405
Accumulated Amortization	(128,365)		(128,365)		(105,571)
Total	276,896		276,896		253,834
Amortization expense for intangible assets	12,206	$ 9,406	22,954	$ 18,557
Trade Names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	131,141		131,141		117,881
Accumulated Amortization	(37,281)		(37,281)		(30,093)
Total	93,860		93,860		87,788
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	265,825		265,825		233,513
Accumulated Amortization	(85,551)		(85,551)		(71,215)
Total	180,274		180,274		162,298
Other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	8,295		8,295		8,011
Accumulated Amortization	(5,533)		(5,533)		(4,263)
Total	$ 2,762		$ 2,762		$ 3,748

- Definition

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.

+ References + Details

Revenue Recognition - Schedule of Disaggregation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 439,536	$ 377,984	$ 855,622	$ 726,254
Intersegment revenue elimination
Disaggregation of Revenue [Line Items]
Revenue	(668)	0	(1,063)	0
United States
Disaggregation of Revenue [Line Items]
Revenue	355,252	307,258	683,895	591,369
Canada
Disaggregation of Revenue [Line Items]
Revenue	30,978	36,193	60,366	72,654
Europe
Disaggregation of Revenue [Line Items]
Revenue	11,753	17,540	30,847	34,456
Pacific Rim
Disaggregation of Revenue [Line Items]
Revenue	4,266	1,054	8,489	2,991
Latin America
Disaggregation of Revenue [Line Items]
Revenue	35,071	13,439	67,180	20,868
Other
Disaggregation of Revenue [Line Items]
Revenue	$ 2,884	$ 2,500	$ 5,908	$ 3,916

- Definition

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.

+ References + Details

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-41

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (ee)
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+ Details

Business Acquisitions

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Business Acquisitions

Note 3 – Business Acquisitions

DSG and its operating companies acquired businesses during the first six months of 2024 and the year ended December 31, 2023. The acquisitions were accounted for under ASC 805, the acquisition method of accounting. For each acquisition, the allocation of consideration exchanged to the assets acquired and liabilities assumed was based on estimated acquisition-date fair values. The final valuations will be completed within the one-year measurement period following the respective acquisition date, and any adjustments will be recorded in the period in which the adjustments are determined.

2024 Acquisitions

S&S Automotive

On May 1, 2024, DSG acquired all of the issued and outstanding capital stock of S&S Automotive Inc. (“S&S Automotive” and the “S&S Automotive Transaction”), with a purchase price of approximately $80.0 million, net of cash acquired of $0.7 million. S&S Automotive is a distributor of automotive, industrial, and safety supplies primarily to the automotive dealership market based near Chicago in Woodridge, Illinois. S&S Automotive was acquired to expand Lawson’s services and products to the automotive end market. Accordingly, the results of operations of S&S Automotive are included within the Lawson reportable segment. The acquisition was funded using DSG’s cash on hand and its revolving credit facility.


	S&S Automotive
(in thousands)	May 1, 2024 Acquisition Date
Accounts receivable	$	4,100
Inventory	7,100
Other current assets	306
Property, plant and equipment	2,351
Right of use assets	7,581
Other intangible assets:
Customer relationships	30,200
Trade names	12,200

Other assets	35
Accounts payable	(1,120)
Lease liabilities	(7,604)
Accrued expenses and other liabilities	(1,989)
Goodwill	26,892
Total purchase consideration exchanged, net of cash acquired	$	80,052
Cash consideration	$	78,659
Deferred consideration(1)	1,393
Total purchase consideration exchanged, net of cash acquired	$	80,052

(1) The Company paid $0.7 million of the S&S Automotive deferred consideration during the three and six months ended June 30, 2024.

Certain estimated values for the S&S Automotive Transaction, including working capital and other liability adjustments, right of use assets, the valuation of intangibles and property, plant and equipment and income taxes are not yet finalized, and the preliminary purchase price allocation is subject to change as the Company completes its analysis of the fair value at the date of acquisition.

The customer relationships and trade names intangible assets have estimated useful lives of 17 years and 8 years, respectively. As a result of the S&S Automotive Transaction, the Company recorded tax deductible goodwill of $26.9 million in 2024 that may result in a tax benefit in future periods and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

Emergent Safety Supply

On January 19, 2024, DSG acquired 100% of the certain assets of Safety Supply Illinois LLC, conducting business as Emergent Safety Supply (“ESS” and the “ESS Transaction”), with a purchase price of $9.9 million. ESS is a national distributor of safety products based near Chicago in Batavia, Illinois. ESS was acquired to expand Lawson’s safety product category. Accordingly, the results of operations of ESS are included within the Lawson reportable segment. The acquisition was funded using DSG’s cash on hand.


	Emergent Safety Supply
(in thousands)	January 19, 2024 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable	$	1,363	$	—	$	1,363
Inventory	1,399		—		1,399
Other current assets	10		—		10
Property, plant and equipment	228		—		228
Right of use assets	550		—		550
Other intangible assets:
Customer relationships	2,700		100		2,800
Trade names	1,400		—		1,400

Other assets	11		—		11
Accounts payable	(205)		—		(205)
Lease liabilities	(550)		—		(550)
Accrued expenses and other liabilities	(25)		—		(25)
Goodwill	2,973		(100)		2,873
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854
Cash consideration	$	8,904	$	—	$	8,904
Deferred consideration	950		—		950
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854

Certain estimated values for the ESS Transaction, including the valuation of intangibles and property, plant and equipment, are not yet finalized, and the preliminary purchase price allocation is subject to change as the Company completes its analysis of the fair value at the date of acquisition. Following the initial fair value measurement, the Company updated the purchase price allocation for ESS primarily related to the ongoing review of the opening balance sheet and revised certain assumptions used in estimating the fair value. The adjustments resulted in a $0.1 million increase to customer relationships and a $0.1 million decrease to goodwill.

The customer relationships and trade names intangible assets have estimated useful lives of 16 years and 8 years, respectively. As a result of the ESS Transaction, the Company recorded tax deductible goodwill of $3.0 million in 2024 that may result in a tax benefit in future periods and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

2023 Acquisition

On June 8, 2023, DSG acquired all of the issued and outstanding capital stock of HIS Company, Inc., a Texas corporation (“Hisco” and the “Hisco Transaction”), a distributor of specialty products serving industrial technology applications, pursuant to a Stock Purchase Agreement dated March 30, 2023 (the “Purchase Agreement”). In connection with this transaction, DSG combined the operations of TestEquity and Hisco, further expanding the product and service offerings at TestEquity, as well as all of our operating businesses under DSG. The results of operations of Hisco are included within the TestEquity reportable segment.

The total purchase consideration exchanged for the Hisco Transaction was $267.2 million, net of cash acquired of $12.2 million, with a potential additional earn-out payment subject to Hisco achieving certain performance targets. Refer to Note 8 – Earnout Liabilities for additional information on the earn-out. DSG will also pay $37.5 million in cash or DSG common stock in retention bonuses to certain Hisco employees that remain employed with Hisco or its affiliates for at least twelve months after the closing of the Hisco Transaction. Pursuant to the Purchase Agreement, the Company paid $1.8 million of the retention bonuses in 2023 and $2.3 million of the retention bonuses in the first six months of 2024 and will pay $32.3 million of the retention bonuses during the third quarter of 2024, with the remaining balance of $1.1 million to be paid in 2025. Compensation expense is recorded over the service period for the retention bonuses as a component of Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income

(Loss). Compensation expense was $6.4 million and $16.0 million for the three and six months ended June 30, 2024, respectively, and $2.3 million for the three and six months ended June 30, 2023.

DSG funded the Hisco Transaction with borrowings under its 2023 Amended Credit Agreement (as defined below) and proceeds raised from the Rights Offering (as defined below). Refer to Note 9 – Debt for information about the 2023 Amended Credit Agreement and Note 11 – Stockholders’ Equity for details on the Rights Offering.

The Purchase Agreement allowed certain eligible Hisco employees to invest all or a portion of their respective closing payment in DSG common stock at $22.50 per share, up to an aggregate value of DSG common stock issued to such eligible Hisco employees of $25.0 million. During the third quarter of 2023, the Company issued 144,608 shares of DSG common stock to the eligible Hisco employees and received approximately $3.3 million. During the third quarter of 2023, approximately $0.4 million was recorded as compensation expense for the discount between the prevailing market price of the DSG common stock on the date of purchase and the purchase price of $22.50 per share as a component of Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).


	Hisco
(in thousands)	June 8, 2023 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable(1)	$	66,792	$	(2,269)	$	64,523
Inventory	61,300		(645)		60,655
Other current assets	3,858		350		4,208
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		(1,800)		40,000
Trade names	25,600		(300)		25,300

Deferred tax liability, net of deferred tax asset	(2,544)		81		(2,463)
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)		(289)		(9,250)

Goodwill	49,718		122		49,840
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156
Cash consideration	$	252,007	$	—	$	252,007
Deferred consideration(2)	12,418		2,631		15,049
Contingent consideration	6,000		(5,900)		100
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156

Following the initial fair value measurement, the Company updated the purchase price allocation for Hisco primarily related to the ongoing review of the opening balance sheet and contractual working capital adjustments and revised certain assumptions used in estimating the fair value of the contingent consideration. During 2023 and 2024, the adjustments to these balances resulted in a $0.1 million increase to goodwill and a $3.3 million decrease to the total purchase consideration, net of cash acquired. The accounting for the Hisco Transaction was completed during the second quarter of 2024.

The customer relationships and trade names intangible assets have estimated useful lives of 12 years and 8 years, respectively. As a result of the Hisco Transaction, the Company recorded tax deductible goodwill of $41.4 million in 2023 that

may result in a tax benefit in future periods and is primarily attributable to the benefits we expect to derive from expected synergies, including expanded product and service offerings and cross-selling opportunities.

Unaudited Pro Forma Information


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	443,067	$	469,269	$	869,217	$	935,205


Net income	$	191	$	4,233	$	(5,476)	$	6,606

Actual Results of Business Acquisitions


	Three Months Ended March 31,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	10,112	$	28,001	$	12,401	$	28,001
Net Income	$	(467)	$	(865)	$	(411)	$	(865)

The Company incurred transaction and integration costs related to completed and contemplated acquisitions of $3.6 million and $5.6 million for the three and six months ended June 30, 2024 and $5.1 million and $9.2 million for the three and six months ended June 30, 2023, which are included in Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Cash Flows [Abstract]
Offering costs	$ 1,531	$ 1,531	$ 1,531

Earnings Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share

Note 12 – Earnings Per Share

As a result of the Stock Split 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 June 30,				Six Months Ended June 30,
(in thousands, except share and per share data)	2024		2023		2024		2023

Basic income per share:
Net income (loss)	$	1,896	$	3,024	$	(3,328)	$	8,931
Basic weighted average shares outstanding	46,818,932		43,621,236		46,798,055		42,935,198
Basic income (loss) per share of common stock	$	0.04	$	0.07	$	(0.07)	$	0.21

Diluted income per share:
Net income (loss)	$	1,896	$	3,024	$	(3,328)	$	8,931
Basic weighted average shares outstanding	46,818,932		43,621,236		46,798,055		42,935,198
Effect of dilutive securities	804,780		373,778		—		370,020





Diluted weighted average shares outstanding	47,623,712		43,995,014		46,798,055		43,305,218
Diluted income (loss) per share of common stock	$	0.04	$	0.07	$	(0.07)	$	0.21
Anti-dilutive securities excluded from the calculation of diluted income per share	289		1,564		844,374		12,002

Business Acquisitions - Schedule of Unaudited Pro Forma Information and Actual Results of Business Acquisitions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Pro forma, revenue	$ 443,067	$ 469,269	$ 869,217	$ 935,205
Pro forma, net income	191	4,233	(5,476)	6,606
Revenue	10,112	28,001	12,401	28,001
Net Income	$ (467)	$ (865)	$ (411)	$ (865)

Revenue Recognition - Schedule of Rental Revenue from Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue from operating leases	$ 439,536	$ 377,984	$ 855,622	$ 726,254
Rental Program
Disaggregation of Revenue [Line Items]
Revenue from operating leases	$ 4,125	$ 4,822	$ 8,410	$ 10,923

- Definition

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.

+ References + Details

- Definition

+ References

+ Details

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Related Party Transaction [Line Items]
Selling, general and administrative expenses	$ 137,369	$ 122,247	$ 277,995	$ 238,397
Related Party \| Related Party, Managed Services Agreements
Related Party Transaction [Line Items]
Selling, general and administrative expenses	$ 300	$ 0	$ 700	$ 100
Majority Shareholder \| Distribution Solutions Group \| LKCM Headwater Operations, LLC
Related Party Transaction [Line Items]
Shares owned by related party (in shares)	36,357,588		36,357,588
Noncontrolling ownership (as a percent)	77.70%		77.70%

Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands		1 Months Ended	3 Months Ended	6 Months Ended
	Aug. 15, 2023	Aug. 31, 2023	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) $ / shares	Jun. 30, 2023 USD ($)	Dec. 31, 2023 $ / shares	Mar. 31, 2023 $ / shares	Dec. 31, 2022 $ / shares
Statement of Stockholders' Equity [Abstract]
Common stock, par value (in USD per share) \| $ / shares				$ 1		$ 1	$ 1	$ 1
Offering costs \| $			$ 1,531	$ 1,531	$ 1,531
Stock split ratio, common stock	2	2

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue by Geographic Area

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
United States	$	355,252	$	307,258	$	683,895	$	591,369
Canada	30,978		36,193		60,366		72,654
Europe	11,753		17,540		30,847		34,456
Pacific Rim	4,266		1,054		8,489		2,991
Latin America	35,071		13,439		67,180		20,868
Other	2,884		2,500		5,908		3,916
Intersegment revenue elimination	(668)		—		(1,063)		—
Total revenue	$	439,536	$	377,984	$	855,622	$	726,254

Schedule of Rental Revenue from Operating Leases

Rental revenue from operating leases:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue from operating leases	$	4,125	$	4,822	$	8,410	$	10,923

Leases - Schedule of Weighted Average Lease Terms and Interest Rates of Leases Held (Details)	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Operating leases, weighted average remaining lease term	6 years	6 years 7 months 6 days
Operating leases, weighted average interest rate	7.80%	7.80%
Finance leases, weighted average remaining lease term	3 years 7 months 6 days	2 years 9 months 18 days
Finance leases, weighted average interest rate	7.40%	7.10%

Leases - Schedule of Expenses Related to Leasing Activity (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) property	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) property	Jun. 30, 2023 USD ($)
Leases [Abstract]
Operating lease expense	$ 6,086	$ 4,519	$ 11,816	$ 9,399
Financing Lease Amortization	136	136	265	260
Financing Lease Interest	26	23	49	44
Financing Lease Expense	162	159	314	304
Sublease income	(106)	0	(106)	0
Net Lease Cost	$ 6,142	$ 4,678	$ 12,024	$ 9,703
Number of leased properties subleased \| property	1		1
Lease term (in years)	2 years		2 years

Stockholders' Equity	6 Months Ended
Stockholders' Equity	Jun. 30, 2024
Equity [Abstract]
Stockholders' Equity	Note 11 – Stockholders’ Equity Rights Offering The Company completed a subscription rights offering on May 30, 2023 (the “Rights Offering”) that raised gross proceeds of approximately $100.0 million and resulted in the issuance of 4,444,444 shares of DSG common stock at a purchase price of $22.50 per share. Net proceeds were approximately $98.5 million after transaction costs of $1.5 million related to the issuance of DSG common stock for the Rights Offering, which were recorded against Capital in excess of par value in the Unaudited Condensed Consolidated Balance Sheets. DSG used the proceeds from the Rights Offering, in combination with borrowings under the 2023 Amended 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. During the second quarter of 2024, the Company repurchased 55,844 shares of DSG common stock under the repurchase program at an average cost of $30.14 per share for a total cost of $1.7 million. No shares were repurchased during the first quarter of 2024 or during the first six months of 2023 under the Company’s stock repurchase program. The remaining availability for stock repurchases under the program was $27.3 million at June 30, 2024.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
-Paragraph 13
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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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-SubTopic 10
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-Section 50
-Paragraph 18
-Subparagraph (a)
-Publisher FASB
-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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-Section 50
-Paragraph 18
-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
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-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

+ Details

Goodwill and Intangible Assets - Schedule of Estimated Aggregate Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remaining 2024	$ 24,453
2025	44,838
2026	41,321
2027	36,016
2028	31,525
Thereafter	98,743
Total	$ 276,896	$ 253,834

Nature of Operations and Basis of Presentation (Details)		1 Months Ended	6 Months Ended
	Aug. 15, 2023	Aug. 31, 2023	Jun. 30, 2024 segment	Aug. 25, 2023 shares
Accounting Policies [Abstract]
Principal operating segment \| segment			3
Stock split ratio, common stock	2	2
Stock split, additional shares to be received per share already owned (in shares) \| shares				1

Leases - Schedule of Cash Outflows of Leasing Activity (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating cash flows from operating leases	$ (9,786)	$ (6,710)
Operating cash flows from financing leases	(97)	(121)
Financing cash flows from financing leases	$ (237)	$ (249)

Stockholders' Equity - Rights Offering (Narrative) (Details) - Rights Offering $ / shares in Units, $ in Millions	May 30, 2023 USD ($) $ / shares shares
Class of Stock [Line Items]
Common stock, value, subscription price	$ 100.0
Stock sold (in shares) \| shares	4,444,444
Price per share (in dollars per share) \| $ / shares	$ 22.50
Proceeds from issuance of common stock	$ 98.5
Sale of stock, transaction costs	$ 1.5

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Reference 2: http://www.xbrl.org/2003/role/recommendedDisclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Earnings Per Share

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except share and per share data)	2024		2023		2024		2023

Basic income per share:
Net income (loss)	$	1,896	$	3,024	$	(3,328)	$	8,931
Basic weighted average shares outstanding	46,818,932		43,621,236		46,798,055		42,935,198
Basic income (loss) per share of common stock	$	0.04	$	0.07	$	(0.07)	$	0.21

Diluted income per share:
Net income (loss)	$	1,896	$	3,024	$	(3,328)	$	8,931
Basic weighted average shares outstanding	46,818,932		43,621,236		46,798,055		42,935,198
Effect of dilutive securities	804,780		373,778		—		370,020





Diluted weighted average shares outstanding	47,623,712		43,995,014		46,798,055		43,305,218
Diluted income (loss) per share of common stock	$	0.04	$	0.07	$	(0.07)	$	0.21
Anti-dilutive securities excluded from the calculation of diluted income per share	289		1,564		844,374		12,002

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ (180)	$ 535	$ (4,257)	$ 2,647
Effective income tax rate	(10.50%)	15.00%	56.10%	22.90%

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

+ Details

Supplemental Financial Statement Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Condensed Financial Information Disclosure [Abstract]
Accrued severance and acquisition related retention bonus	$ 36,085	$ 21,128
Accrued compensation	20,414	25,371
Accrued and withheld taxes, other than income taxes	9,703	8,661
Accrued interest	8,375	3,301
Accrued customer rebates	5,041	5,473
Accrued stock-based compensation	4,324	5,573
Accrued health benefits	1,963	1,728
Accrued income taxes	1,750	1,994
Deferred acquisition payments and accrued earnout liabilities	1,679	7,513
Deferred revenue	987	810
Other	17,795	15,689
Total accrued expenses and other current liabilities	$ 108,116	$ 97,241

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Expenses Related to Leasing Activity and Weighted Average Lease Terms and Interest Rates of Leases Held and Cash Outflows of Leasing Activity

The Company leases property used for warehousing, distribution centers, office space, branch locations, equipment and vehicles. The components of lease cost were as follows (in thousands):



		Three Months Ended June 30,				Six Months Ended June 30,
Lease Type	Classification	2024		2023		2024		2023
Operating Lease Expense(1)	Operating expenses	$	6,086	$	4,519	$	11,816	$	9,399
Financing Lease Amortization	Operating expenses	136		136		265		260
Financing Lease Interest	Interest expense	26		23		49		44
Financing Lease Expense		162		159		314		304
Sublease income(2)		(106)		—		(106)		—
Net Lease Cost		$	6,142	$	4,678	$	12,024	$	9,703

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

The weighted average lease terms and interest rates of leases held as of June 30, 2024 and December 31, 2023 were as follows:

June 30, 2024

December 31, 2023

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Weighted average remaining lease term

6.0 years

3.6 years

6.6 years

2.8 years

Weighted average interest rate

7.8%

7.4%

7.8%

7.1%

The cash outflows of leasing activity for the six months ended June 30, 2024 and 2023 were as follows (in thousands):


		Six Months Ended June 30,
Cash Flow Source	Classification	2024		2023
Operating cash flows from operating leases	Operating activities	$	(9,786)	$	(6,710)
Operating cash flows from financing leases	Operating activities	(97)		(121)
Financing cash flows from financing leases	Financing activities	(237)		(249)

Schedule of Value of Net Assets and Liabilities Related to Operating and Finance Leases

The value of net assets and liabilities related to our operating and finance leases as of June 30, 2024 and December 31, 2023 was as follows (in thousands):


Lease Type	June 30, 2024		December 31, 2023
Total ROU operating lease assets	$	84,878	$	76,340
Total ROU financing lease assets	1,640		1,560
Total lease assets	$	86,518	$	77,900

Total current operating lease obligation	$	16,330	$	13,010
Total current financing lease obligation	547		539
Total current lease obligation	$	16,877	$	13,549

Total long-term operating lease obligation	$	72,571	$	66,234
Total long-term financing lease obligation	909		831
Total long-term lease obligation	$	73,480	$	67,065

Schedule of Value of Lease Liabilities Related to Operating Leases

The value of lease liabilities related to our operating and finance leases and sublease income as of June 30, 2024 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total		Sublease Income
Remaining 2024	$	10,873	$	359	$	11,232	$	315
2025	21,567		523		22,090		640
2026	17,871		429		18,300		326
2027	15,904		200		16,104		—
2028	13,915		95		14,010		—
Thereafter	35,414		16		35,430		—
Total lease payments	115,544		1,622		117,166		1,281
Less: Interest	(26,643)		(166)		(26,809)		—
Present value of lease liabilities	$	88,901	$	1,456	$	90,357	$	1,281

Schedule of Value of Lease Liabilities Related to Finance Leases

The value of lease liabilities related to our operating and finance leases and sublease income as of June 30, 2024 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total		Sublease Income
Remaining 2024	$	10,873	$	359	$	11,232	$	315
2025	21,567		523		22,090		640
2026	17,871		429		18,300		326
2027	15,904		200		16,104		—
2028	13,915		95		14,010		—
Thereafter	35,414		16		35,430		—
Total lease payments	115,544		1,622		117,166		1,281
Less: Interest	(26,643)		(166)		(26,809)		—
Present value of lease liabilities	$	88,901	$	1,456	$	90,357	$	1,281

Lessor, Operating Lease, Payment to be Received, Maturity

The value of lease liabilities related to our operating and finance leases and sublease income as of June 30, 2024 was as follows (in thousands):


Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total		Sublease Income
Remaining 2024	$	10,873	$	359	$	11,232	$	315
2025	21,567		523		22,090		640
2026	17,871		429		18,300		326
2027	15,904		200		16,104		—
2028	13,915		95		14,010		—
Thereafter	35,414		16		35,430		—
Total lease payments	115,544		1,622		117,166		1,281
Less: Interest	(26,643)		(166)		(26,809)		—
Present value of lease liabilities	$	88,901	$	1,456	$	90,357	$	1,281

Business Acquisitions - Actual Results of Business Acquisitions (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Merger transaction costs	$ 3.6	$ 5.1	$ 5.6	$ 9.2