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• Revenue: $1.8 billion for fiscal 2024, up almost 15% year-over-year.

• Trailing 12-Month Revenue: Approximately $1.95 billion, including pre-acquisition revenues.

• Adjusted Free Cash Flow: $175 million.

• Fourth Quarter Revenue: $480.5 million, an increase of 18.6% from the previous year.

• Organic Sales Growth: 3.5% over the same quarter a year ago.

• Adjusted EBITDA: $44.9 million or 9.3% of sales for the fourth quarter.

• Operating Income: $20.1 million for the fourth quarter.

• Adjusted Earnings Per Share: $0.42 for the fourth quarter.

• Cash Flow from Operations: Approximately $46 million for the fourth quarter.

• Debt Leverage: 3.5 times at the end of Q4.

• Net Capital Expenditures: $3.4 million for the fourth quarter.

• Return on Invested Capital (ROIC): Approximately 11% inclusive of acquisitions.

• Warning! GuruFocus has detected 6 Warning Signs with DSGR.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Distribution Solutions Group Inc (NASDAQ:DSGR) reported a significant revenue increase of almost 15% for fiscal 2024, reaching $1.8 billion, primarily driven by strategic acquisitions.

• The company successfully expanded its revenue both organically and through five strategic acquisitions, enhancing its scale, geographic footprint, and customer base.

• DSGR's adjusted free cash flow grew to $175 million, indicating strong financial health and operational efficiency.

• The company has made substantial investments in its sales force and digital tools, which are expected to enhance customer engagement and drive long-term growth.

• DSGR's Jexpro Services segment reported a notable EBITDA margin expansion of 160 basis points for the full year, driven by strong performance in aerospace, defense, technology, and renewables markets.

Negative Points

• The company faced persistent macroeconomic headwinds throughout 2024, impacting its business units and overall performance.

• Lawson Products, a key segment of DSGR, experienced a significant decline in military sales, down over 50% for the full year, due to changes in the military ordering process.

• The integration of Source Atlantic into the Canada Branch Division has compressed DSGR's overall margins, with a 50 basis point impact on consolidated margins in Q4.

• DSGR's Test Equity Group faced challenges in the electronics assembly market, causing softness in the electronic production supplies segment.

• The company is still in the early stages of integrating recent acquisitions, which may continue to create near-term earnings volatility and margin compression.