10q10k10q10k.net

What changed in Distribution Solutions Group, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Distribution Solutions Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+246 added−352 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-06)

Top changes in Distribution Solutions Group, Inc.'s 2025 10-K

246 paragraphs added · 352 removed · 195 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

53 edited+12 added−16 removed22 unchanged
Biggest changeRevenue percentages by customer end markets in 2024 were as follows: End Markets Percentage of Canada Branch Division Revenue Contractors 25% Machining and manufacturing 24% Mining and oil & gas 13% Government and military 6% Forestry 4% Wholesale 4% Utilities 3% Transportation 3% Shipbuilding and repair 2% Construction 1% Engineering and consulting 1% Other 14% 100% Canada Branch Division’s customers include a wide range of purchasers of industrial supply products from small independent contractors to large manufacturers, and governmental and military accounts. 12 Products — Canada Branch Division’s revenue percentages by product categories in 2024 were as follows: Product Category Percentage of Canada Branch Division Revenue Fasteners 24% Tools and equipment 13% Safety 11% Plumbing 8% Mobile valve 7% Machine 7% Industrial - Other 6% Cutting tools and abrasives 5% Power transmission 3% Engineering 3% Other 13% 100% Canada Branch Division offers over 135,000 different products of which over 92,500 products are maintained in distribution centers and physical store branch locations.
Biggest changeRevenue percentages by customer end markets in 2025 were as follows: End Markets Percentage of Canada Branch Division Revenue Machining and manufacturing 31% Contractors 23% Government and military 9% Forestry 6% Utilities 6% Wholesale 5% Mining and oil & gas 3% Shipbuilding and repair 3% Transportation 2% Engineering and consulting 1% Other 11% 100% Canada Branch Division’s customers include a wide range of purchasers of industrial supply products from small independent contractors to large manufacturers, and governmental and military accounts.
The DSG leadership team provides oversight to these separate leadership teams. This structure helps the combined company to leverage best practices, back-office resources and technologies across the three operating companies to help drive cost synergies and efficiencies.
The DSG leadership team provides oversight to these separate leadership teams. This structure helps the combined company leverage best practices, back-office resources and technologies across the three operating companies to help drive cost synergies and efficiencies.
The combined company has the ability to utilize its combined financial resources to accelerate a strategy of expansion through both business acquisitions and organic growth. Organic Growth Strategy We intend to grow our businesses organically by exploring growth opportunities that provide different channels to reach customers, increase revenue and generate positive results.
The 5 combined company has the ability to utilize its combined financial resources to accelerate a strategy of expansion through both business acquisitions and organic growth. Organic Growth Strategy We intend to grow our businesses organically by exploring growth opportunities that provide different channels to reach customers, increase revenue and generate positive results.
Human Capital Resources — Canada Branch Division supports a culture of continuous improvement, integrity and diversity and prides itself on its committed team that is driven to meet customers’ needs through quality service.
Human Capital Resources — Canada Branch Division supports a culture of continuous improvement and integrity and prides itself on its committed team that is driven to meet customers’ needs through quality service.
Background and Operations — Canada Branch Division combines the operations of our Bolt Supply House (“Bolt”) and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, and related value-add services to the Canadian MRO market primarily through the sale of products to its walk-up customers throu gh 38 branch loc ations.
Background and Operations — Canada Branch Division combines the operations of our Bolt Supply House (“Bolt”) and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, and related value-add services to the Canadian MRO market primarily through the sale of products to its walk-up customers throu gh 35 branch loc ations.
Lambert served as the Corporate Controller, and previously the Assistant Controller, of Univar Solutions, a chemical distribution company, publicly traded on the NYSE from June 2017 through June 2021. Prior to these roles, Mr. Lambert held progressive roles within finance and accounting at several other publicly traded companies. 14 Table of Contents
Lambert served as the Corporate Controller, and previously the Assistant Controller, of Univar Solutions, a chemical distribution company, publicly traded on the NYSE from June 2017 through June 2021. Prior to these roles, Mr. Lambert held progressive roles within finance and accounting at several other publicly traded companies. 13 Table of Contents
Through its collective businesses, DSG is dedicated to helping customers lower their total cost of operation by increasing productivity and efficiency with the right products, expert technical support, and fast, reliable delivery to be a one-stop solution provider. DSG serves approximately 200,000 distinct customers in several diverse end markets supported by approximately 4,400 dedicated employees and strong vendor partnerships.
Through its collective businesses, DSG is dedicated to helping customers lower their total cost of operation by increasing productivity and efficiency with the right products, expert technical support, and fast, reliable delivery to be a one-stop solution provider. DSG serves approximately 220,000 distinct customers in several diverse end markets supported by approximately 4,300 dedicated employees and strong vendor partnerships.
Lambert 51 2021 Vice President, Controller and Chief Accounting Officer 13 Biographical information for the past five years relating to each of our executive officers is set forth below. Mr. King was elected President and Chief Executive Officer in May 2022. Mr.
Lambert 52 2021 Vice President, Controller and Chief Accounting Officer Biographical information for the past five years relating to each of our executive officers is set forth below. Mr. King was elected President and Chief Executive Officer in May 2022. Mr.
Lawson’s largest customer accounted for approximately 4% of Lawson’s revenue. In 2024 , approximately 92% of Lawson’s revenue was generated in the United States and approximately 8% in Canada.
Lawson’s largest customer accounted for approximately 4% of Lawson’s revenue. In 2025 , approximately 92% of Lawson’s revenue was generated in the United States and approximately 8% in Canada.
We encounter competition from several national distributors and manufacturers and a large number of regional and local distributors. Some competitors have greater financial and personnel resources, handle more extensive lines of merchandise, operate larger facilities and price some merchandise more competitively than we do. Customers — During 2024, the Lawson segment sold products to over 53,000 distinct customers.
We encounter competition from several national distributors and manufacturers and a large number of regional and local distributors. Some competitors have greater financial and personnel resources, handle more extensive lines of merchandise, operate larger facilities and price some merchandise more competitively than we do. 6 Customers — During 2025, the Lawson segment sold products to over 51,000 distinct customers.
During 2024, Lawson purchased products from approximately 2,400 suppliers and no single supplier accounted for more than 4% of these purchases. The loss of one core supplier could affect operations by hindering the ability to provide full service to customers. Lawson’s quality control department tests its product offerings to help ensure they meet our customers’ specifications.
During 2025, Lawson purchased products from approximately 2,200 suppliers and no single supplier accounted for more than 6% of these purchases. The loss of one core supplier could affect operations by hindering the ability to provide full service to customers. Lawson’s quality control department tests its product offerings to help ensure they meet our customers’ specifications.
Gexpro Services has manufacturing and supply chain operations in over 34 service center sites across twelve countries including key geographies in North America, South America, Asia, Europe, and the Middle East. Gexpro Services serves customers in six vertical markets, including renewables, industrial power, consumer and industrial, technology, transportation, and aerospace and defense.
Gexpro Services has manufacturing and supply chain operations in over 35 service center sites across thirteen countries including key geographies in North America, South America, Asia, 9 Europe, and the Middle East. Gexpro Services serves customers in six vertical markets, including renewables, industrial power, consumer and industrial, technology, transportation, and aerospace and defense.
Approximately 100% of Canada Branch Division’ s revenue was generated in Canada. Although seasonality is not significant, due to fewer selling days and less activity during the holiday season, revenue in the fourth quarter is historically lower than the first three quarters of the year. Canada Branch Division’ s customers operate in a variety of industries.
Although seasonality is not significant, due to fewer selling days and less activity during the holiday season, revenue in the fourth quarter is historically lower than the first three quarters of the year. 11 Canada Branch Division’ s customers operate in a variety of industries.
TestEquity’s revenue percentages by customer end markets in 2024 were as follows: End Markets Percentage of TestEquity Revenue Electronics manufacturing 33% Aerospace and defense 17% Medical 7% Reseller 6% Automotive 6% General industrial 5% Wireless and communications technology 4% Semi-conductor production 2% Other 20% 100% 9 Products — Approximately 19,000 fast-moving products are typically held in inventory across 40 distribution centers available for next day delivery.
TestEquity’s revenue percentages by customer end markets in 2025 were as follows: End Markets Percentage of TestEquity Revenue Electronics manufacturing 31% Aerospace and defense 20% Medical 8% Reseller 7% Automotive 7% General industrial 6% Wireless and communications technology 5% Semi-conductor production 2% Other 14% 100% Products — Approximately 7,000 fast-moving products are typically held in inventory across 41 distribution centers available for next day delivery.
Gexpro Services maintains favorable and long-tenured relationships with approximately 2,800 suppliers, with the largest supplier representing approximately 2% of Gexpro Services’ total product purchases in 2024 while the top 10 suppliers represented approximately 17% of total product purchases in 2024. Human Capital Resources — Gexpro Services supports a culture of continuous improvement, integrity and diversity.
Gexpro Services maintains favorable and long-tenured relationships with approximately 3,300 suppliers, with the largest supplier representing 10 approximately 2% of Gexpro Services’ total product purchases in 2025 while the top 10 suppliers represented approximately 16% of total product purchases in 2025. Human Capital Resources — Gexpro Services supports a culture of continuous improvement and integrity.
During 2024, Canada Branch Division purchased products from approximately 2,400 suppliers with the largest supplier representing approximately 18% of total product purchases in 2024. Canada Branch Division maintains favorable and long-tenured relationships with approximately 2,400 suppliers. The loss of one core supplier could affect operations by hindering the ability to provide full service to customers.
During 2025, Canada Branch Division purchased products from approximately 3,000 suppliers with the largest supplier representing approximately 9% of total product purchases in 2025. Canada Branch Division maintains favorable and long-tenured relationships with its suppliers. The loss of one core supplier could affect operations by hindering the ability to provide full service to customers.
Customers — TestEquity serves over 107,000 customers at 128,000 locations across the United States and abroad, primarily in Canada, Europe and Mexico with approximately 81% of TestEquity’s revenue in 2024 derived from customers in the United States. There is no significant seasonality in TestEquity’s business across its fiscal quarters.
Customers — TestEquity serves over 127,000 customers at 144,000 locations across the United States and abroad, primarily in Canada, Europe and Mexico with approximately 83% of TestEquity’s revenue in 2025 derived from customers in the United States. There is no significant seasonality in TestEquity’s business across its fiscal quarters.
As of December 31, 2024 , TestEquity’s workforce had 1,160 individuals, comprised of approximately 250 in sales and marketing, 550 in operation and distribution and 360 in administration and support. Gexpro Services Gexpro Services is a world-class global supply chain solutions provider, specializing in the development of mission critical production line management, aftermarket and field installation programs.
As of December 31, 2025 , TestEquity’s workforce had 1,140 individuals, comprised of approximately 370 in sales and marketing, 600 in operation and distribution and 170 in administration and support. Gexpro Services Gexpro Services is a world-class global supply chain solutions provider, specializing in the development of mission critical production line management, aftermarket and field installation programs.
Gexpro Services prides itself on being a full value provider to its customers supported with a team committed to providing world-class customer service. As of December 31, 2024 , Gexpro Services’ workforce had approximately 740 individuals, comprised of approximately 240 in sales and marketing, 430 in operation and distribution and 70 in management and administration.
Gexpro Services prides itself on being a full value provider to its customers supported with a team committed to providing world-class customer service. As of December 31, 2025 , Gexpro Services’ workforce had approximately 800 individuals, comprised of approximately 250 in sales and marketing, 460 in operation and distribution and 90 in management and administration.
Lawson recommends solutions to help customers maximize product performance and avoid costly product failures. Lawson’s engineering department provides technical support for products and offers on-site problem solutions. It also develops and presents product safety and technical training seminars tailored to meet customers’ needs.
Lawson recommends solutions to help customers maximize product performance and avoid costly product failures. Lawson’s engineering department provides technical support for products and offers on-site problem solutions. It also develops and presents product safety and technical training seminars tailored to meet customers’ needs. 7 Human Capital Resources — Lawson supports a culture of continuous improvement and integrity.
Gexpro Services’ revenue percentages by customer end markets in 2024 were as follows: End Markets Percentage of Gexpro Services Revenue Renewable energy 32% Industrial power 19% Transportation 19% Consumer and industrial 13% Aerospace and defense 11% Technology 6% 100% Products — Gexpro Services’ revenue percentages by product categories in 2024 were as follows: Product Category Percentage of Gexpro Services Revenue Hardware 47% Electrical 22% Fabrications 19% Mechanical 12% 100% Approximately 63% of Gexpro Services’ suppliers are based in the United States, which helps limit the risk of increased freight and logistics costs; however, many of these suppliers source their products from overseas.
Gexpro Services’ revenue percentages by customer end markets in 2025 were as follows: End Markets Percentage of Gexpro Services Revenue Renewable energy 33% Industrial power 18% Transportation 17% Aerospace and defense 13% Consumer and industrial 11% Technology 8% 100% Products — Gexpro Services’ revenue percentages by product categories in 2025 were as follows: Product Category Percentage of Gexpro Services Revenue Hardware 45% Electrical 24% Fabrications 16% Mechanical 15% 100% Approximately 61% of Gexpro Services’ suppliers are based in the United States, which helps limit the risk of increased freight and logistics costs; however, many of these suppliers source their products from overseas.
Competitors of Gexpro Services include large global distributors as well as national, regional and local distributors. Customers — Gexpro Services serves over 2,000 customers in over 49 countries through its 30 facilities. In 2024 , approximately 76% of Gexpro Services’ revenues were generated in the United States.
Competitors of Gexpro Services include large global distributors as well as national, regional and local distributors. Customers — Gexpro Services serves over 2,100 customers in over 52 countries through its 32 facilities. In 2025 , approximately 74% of Gexpro Services’ revenues were generated in the United States.
Human Capital Resources — As of December 31, 2024 , Lawson’s workforce had 1,740 individuals: approximately 1,030 in sales and marketing of whom approximately 900 are field sales representatives, 420 in operation and distribution and 290 in management and administration. Approximately 13% of the Lawson workforce is covered by three collective bargaining agreements.
As of December 31, 2025 , Lawson’s workforce had 1,740 individuals: approximately 1,050 in sales and marketing of whom approximately 920 are field sales representatives, 400 in operation and distribution and 290 in management and administration. Approximately 13% of the Lawson workforce is covered by three collective bargaining agreements.
As of December 31, 2024 , Canada Branch Division’s workforce had approximately 710 individuals: approximately 480 in operation and distribution, 90 in sales and marketing and 140 in management and administration.
As of December 31, 2025 , 12 Canada Branch Division’s workforce had approximately 630 individuals: approximately 400 in operation and distribution, 90 in sales and marketing and 140 in management and administration.
Information About Our Executive Officers The executive officers of DSG as of February 3, 2025 were as follows: Name Age Year First Named to Present Office Position J. Bryan King 53 2022 Chairman, President and Chief Executive Officer Ronald J. Knutson 61 2014 Executive Vice President, Chief Financial Officer and Treasurer David S.
Information About Our Executive Officers The executive officers of DSG as of February 2, 2026 were as follows: Name Age Year First Named to Present Office Position J. Bryan King 54 2022 Chairman, President and Chief Executive Officer Ronald J. Knutson 62 2014 Executive Vice President, Chief Financial Officer and Treasurer Cesar A.
Knutson has served as Executive Vice President, Chief Financial Officer and Treasurer since April 2014 and has served as Executive Vice President and Chief Financial Officer of the Company since July 2012. Mr. Lambert has served as Vice President, Controller and Chief Accounting Officer of the Company since June 2021. Prior to joining the Company, Mr.
Knutson has served as Executive Vice President, Chief Financial Officer and Treasurer since April 2014 and has served as Executive Vice President and Chief Financial Officer of the Company since July 2012. Mr. Lanuza has served as President and Chief Executive Officer of Lawson since April 2022. Prior to joining the Company, Mr.
As of December 31, 2024 , our combined workforce included approximately 4,400 individuals, comprised of approximately 1,610 in sales and marketing, approximately 1,880 in operation and distribution and approximately 860 in management and administration. Approximately 1,740 individuals are within Lawson, 1,160 are within TestEquity, 740 are within Gexpro Services, and 710 are within Canada Branch Division.
As of December 31, 2025 , our combined workforce included approximately 4,300 individuals, comprised of approximately 1,770 in sales and marketing, approximately 1,860 in operation and distribution and approximately 680 in management and administration. Approximately 1,740 individuals are within Lawson, 1,140 are within TestEquity, 800 are within Gexpro Services, and 630 are within Canada Branch Division.
ITEM 1. BUSINESS. Overview 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.
ITEM 1. BUSINESS. Overview 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. Through the strategic Mergers (as defined below) completed in 2022, the complementary distribution businesses of Lawson Products, Inc.
Unless the context requires otherwise, references in this Annual Report on Form 10-K to “DSG”, the “Company”, “we”, “our” or “us” refer to Distribution Solutions Group, Inc., and all entities consolidated in the accompanying consolidated financial statements.
Unless the context requires otherwise, references in this Annual Report on Form 10-K to “DSG”, the “Company”, “we”, “our” or “us” refer to Distribution Solutions Group, Inc., and all entities consolidated in the accompanying consolidated financial statements. Recent Events 2025 Debt Amendment In December 2025, the Company amended and expanded the senior secured facility through 2030.
Lawson’s product training educates its sales team on the optimal uses of products, enabling them to provide the proper products and customized solutions to address customers’ needs, including technical expertise and on-site problem resolution. Lawson’s leadership team is also focused on reducing sales force turn-over and on offering growth opportunities for its sales representatives.
Lawson’s product training educates its sales team on the optimal uses of products, enabling them to provide the proper products and customized solutions to address customers’ needs, including technical expertise and on-site problem resolution.
Human Capital Resources — TestEquity supports a culture of continuous improvement, integrity and diversity. TestEquity prides itself on its ability to meet its customers’ needs in a driven and progressive manner.
In total, TestEquity purchases from approximately 2,300 suppliers across the marketplace. Human Capital Resources — TestEquity supports a culture of continuous improvement and integrity. TestEquity prides itself on its ability to meet its customers’ needs in a driven and progressive manner.
Hisco is a specialty distribution company serving the electronic assembly, aerospace and defense, medical and other industrial markets. Hisco also offers specialized warehousing for cold storage and vendor managed inventory services.
TestEquity offers over 400,000 products and approximately 900 manufacturer brands with overlap across the following brands. Hisco is a specialty distribution company serving the electronic assembly, aerospace and defense, medical and other industrial markets. Hisco also offers specialized warehousing for cold storage and vendor managed inventory services.
Strategic Focus — Canada Branch Division combines the operations of our Bolt and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, power tools and related value-add services to the Canadian MRO market through the sale of products and services via warehouse shipments and to its walk-up customers through 38 branch locations. 11 Industry and Competition — The MRO market is comprised of companies that buy and stock products in bulk and supply these products to customers on an as needed basis.
Strategic Focus — Canada Branch Division combines the operations of our Bolt and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, power tools and related value-add services to the Canadian MRO market through the sale of products and services via warehouse shipments and to its walk-up customers through 35 branch locations.
Lawson plans to achieve its vision by working closely with customers to maintain and enhance their operations by providing them with quality products, superior service and innovative solutions and to grow both organically and through acquisitions.
Strategic Focus — Lawson’s vision is to be its customers’ first choice for MRO solutions that improve their operating performance. Lawson plans to achieve its vision by working closely with customers to maintain and enhance their operations by providing them with quality products, superior service and innovative solutions and to grow both organically and through acquisitions.
For more information about our segments, refer to Note 14 – Segment Information in Item 8. Financial Statements and Supplementary Data. Lawson 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 throughout the United States and Canada.
Segments The following is a discussion of our four reportable segments: Lawson, TestEquity, Gexpro Services and Canada Branch Division. For more information about our segments, refer to Note 14 – Segment Information in Item 8. Financial Statements and Supplementary Data. Lawson Lawson is a distributor of specialty products and services to the industrial, commercial, institutional and governmental MRO marketplace.
Gexpro Services’ largest customer represented approximately 23% of Gexpro Services’ 2024 total revenue while the top 20 customers represented approximately 82% of Gexpro Services’ 2024 total revenue. Gexpro Services has existing customers in many different industry end markets.
Approximately 70% of Gexpro Services’ revenue in 2025 was from customers under long-term agreements. Gexpro Services’ largest customer represented approximately 18% of Gexpro Services’ 2025 total revenue while the top 20 customers represented approximately 83% of Gexpro Services’ 2025 total revenue. Gexpro Services has existing customers in many different industry end markets.
These products are inventoried and sourced through 30 locations in North America, South America, Asia, Europe and the Middle East. Strategic Focus — Gexpro Services intends to grow organically through market share expansion primarily through new product introduction, increased sales of products and services to existing customers and expansion of its customer base.
Strategic Focus — Gexpro Services intends to grow organically through market share expansion primarily through new product introduction, increased sales of products and services to existing customers and expansion of its customer base.
Techni-Tool is one of the industry’s largest solder, soldering equipment and electronic production distributors. Techni-Tool offers a wide range of products to support electronic production as well as compliance testing. In addition to the brand specific products offered, Techni-Tool also provides VMI solutions and dedicated technical support. Jensen Tools is a top distributor for the electronics MRO customer base.
In addition to the brand specific products offered, Techni-Tool also provides VMI solutions and dedicated technical support. Jensen Tools is a top distributor for the electronics MRO customer base.
TestEquity’s revenue percentages by product categories in 2024 were as follows: Product Category Percentage of TestEquity Revenue Electronic production supplies 62% Test & measurement 35% Rental and refurbished 3% 100% TestEquity has 28 key suppliers that made up approximately 35% of TestEquity’s purchases in 2024. In total, TestEquity purchases from approximately 3,000 suppliers across the marketplace.
TestEquity’s revenue percentages by product categories in 2025 were as follows: Product Category Percentage of TestEquity Revenue Electronic production supplies 60% Test and measurement 26% Fabricated product 6% Rental and refurbished 5% Other 3% 100% TestEquity has 32 key suppliers that made up approximately 38% of TestEquity’s purchases in 2025.
Through its customer base, Gexpro Services provides VMI services with over 155,000 installed bins which allow its customers to maintain the necessary on-hand inventory levels to support their production cycles.
Through its customer base, Gexpro Services provides VMI services with over 155,000 installed bins which allow its customers to maintain the necessary on-hand inventory levels to support their production cycles. Gexpro Services’ value-added processes for its customers include VMI, packaging and kitting, engineering, product standardization when appropriate, sales and technical support, global sourcing and quality assurance.
Lawson’s revenue percentages by customer end markets in 2024 were as follows: End Markets Percentage of Lawson Revenue Automotive 27% Manufacturing 14% Trade wholesale and retail 12% Construction 8% Mining 8% Equipment rental 6% Transportation 5% Government and military 5% Agriculture 3% Other 12% 100% Lawson’s customers include a wide range of purchasers of industrial supply products from small repair shops to large national and governmental accounts. 7 Products — Lawson’s revenue percentages by product categories in 2024 were as follows: Product Category Percentage of Lawson Revenue Aftermarket automotive supplies 18% Fastening systems 17% Fluid power 14% Electrical 11% Specialty chemicals 10% Cutting tools and abrasives 8% Safety 6% Welding and metal repair 2% Other 14% 100% Lawson offers over 157,000 different products of which over 96,000 products are maintained in distribution centers.
Lawson’s revenue percentages by customer end markets in 2025 were as follows: End Markets Percentage of Lawson Revenue Automotive 31% Manufacturing 14% Trade wholesale and retail 11% Construction 8% Mining 7% Equipment rental 6% Transportation 5% Government and military 5% Agriculture 2% Other 11% 100% Lawson’s customers include a wide range of purchasers of industrial supply products from small repair shops to large national and governmental accounts.
TestEquity TestEquity is a leading 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 manufacturing partners.
Lawson’s leadership team is also focused on improving the productivity of its sales team, reducing sales force turn-over and on offering growth opportunities for its sales representatives. TestEquity TestEquity is a leading 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 manufacturing partners.
Some competitors have greater financial and personnel resources, handle more extensive lines of merchandise, operate larger facilities and price some merchandise more competitively than we do. Customers — During 2024, the Canada Branch Division segment sold products to over 40,400 distinct customers. Canada Branch Division’s largest customer accounted for approximately 3% of consolidated revenue.
We encounter competition from regional and local distributors in Canada as well as international distributors and manufacturers. Some competitors have greater financial and personnel resources, handle more extensive lines of merchandise, operate larger facilities and price some merchandise more competitively than we do. Customers — During 2025, the Canada Branch Division segment sold products to over 42,000 distinct customers.
TestEquity operates primarily through its five distribution brands, namely TestEquity, Hisco, TEquipment, Techni-Tool and Jensen Tools, and is focused primarily in North America with a network of sales representatives throughout the United States, Canada, Mexico, Germany and the United Kingdom. 8 Background and Operations — Based out of North Richland Hills, Texas, TestEquity is a large, comprehensive provider of electronic test solutions in the United States supporting the aerospace and defense, wireless and communication, semiconductors, industrial electronics and automotive, and electronics manufacturing industries.
TestEquity operates primarily through its five distribution brands, namely TestEquity, Hisco, Techni-Pro, Techni-Tool and Jensen Tools, and is focused primarily in North America with a network of sales representatives throughout the United States, Canada, Mexico, Germany and the United Kingdom.
The VMI model makes it less likely that customers will run out of a product while optimizing their inventory levels. Lawson ships products to its customers in all 50 states, Puerto Rico, Canada, Mexico and the Caribbean. Strategic Focus — Lawson’s vision is to be its customers’ first choice for MRO solutions that improve their operating performance.
Lawson competes for business primarily by offering a value-added service approach wherein highly trained sales representatives manage the product inventory for customers. The VMI model makes it less likely that customers will run out of a product while optimizing their inventory levels. Lawson ships products to its customers in all 50 states, Puerto Rico, Canada, Mexico and the Caribbean.
TestEquity continues to benefit from electronification of products across a range of industries including the internet of things (“IOT”), electric vehicles (“EV”) and the 5th generation mobile network (“5G”). TestEquity offers over 400,000 products and 800 manufacturer brands with overlap across the following brands.
In addition to a large array of test and measurement products, TestEquity also offers calibration, refurbishment and rental solutions and a wide range of refurbished products. TestEquity continues to benefit from electronification of products across a range of industries including the internet of things (“IOT”), electric vehicles (“EV”) and the 5th generation mobile network (“5G”).
The customer benefits from our knowledge and the convenience of purchasing smaller quantities from stock maintained by us. There is a significant amount of competition within the Canadian MRO industry. We encounter competition from regional and local distributors in Canada as well as international distributors and manufacturers.
Industry and Competition — The MRO market is comprised of companies that buy and stock products in bulk and supply these products to customers on an as needed basis. The customer benefits from our knowledge and the convenience of purchasing smaller quantities from stock maintained by us. There is a significant amount of competition within the Canadian MRO industry.
Background and Operations — Lawson delivers quality products to customers and offers them extensive product knowledge, product application expertise and Vendor Managed Inventory (“VMI”) services. Lawson competes for business primarily by offering a value-added service approach wherein highly trained sales representatives manage the product inventory for customers.
Lawson primarily distributes MRO products to its customers through a network of sales representatives throughout the United States and Canada. Background and Operations — Lawson delivers quality products to customers and offers them extensive product knowledge, product application expertise and Vendor Managed Inventory (“VMI”) services.
DSG was formed in 2022 through the strategic mergers of Lawson Products, a leader in MRO distribution of C-parts, TestEquity, a leader in electronic test & measurement solutions and Gexpro Services, a leading global supply chain services provider to manufacturing customers.
(“Lawson”), a leader in MRO distribution of C-parts, TestEquity Acquisition, LLC (“TestEquity”), a leader in electronic test and measurement solutions, and 301 HW Opus Holdings, Inc., which conducts business as Gexpro Services (“Gexpro Services”), a leading global supply chain services provider to manufacturing customers were combined under the DSG holding company.
In particular, TestEquity strives to improve its digital experience, with a consistent approach for all of its brands. TestEquity intends to increase its market share through continued expansion of product lines and greater penetration of the e-commerce market, enabled through investment in key digital talent and leverage of the existing TestEquity and TEquipment platforms.
TestEquity intends to increase its market share through continued expansion of product lines and greater penetration of the e-commerce market, enabled through investment in key digital talent and leverage of the existing TestEquity and TEquipment platforms. 8 Industry and Competition — Across both the test and measurement and electronic production supplies businesses, the North American market is fragmented with competitors ranging from large global distributors to national and regional distributors.
Industry and Competition — Across both the test and measurement and electronic production supplies businesses, the North American market is fragmented with competitors ranging from large global distributors to national and regional distributors. Some competitors have greater financial and personnel resources, handle more extensive lines of merchandise, operate larger facilities and price some merchandise more competitively than TestEquity.
Some competitors have greater financial and personnel resources, handle more extensive lines of merchandise, operate larger facilities and price some merchandise more competitively than TestEquity.
Refer to Note 9 – Debt included in Item 8. Financial Statements and Supplementary Data for additional information about DSG’s credit agreement.
The new facility includes $700.0 million of term debt and a revolving credit arrangement of $400.0 million, an increase over the previous revolver capacity of $255.0 million. Refer to Note 9 – Debt included in Item 8. Financial Statements and Supplementary Data for information about the Amended Credit Agreement .
Background and Operations — Gexpro Services was formed in November 2019 and, in February 2020, LKCM Headwater acquired the “Gexpro Services” business from French distributor Rexel S.A. via a carve-out acquisition. As a top distributor and service provider to the OEM market, Gexpro Services has approximately 2,800 suppliers offering approximately 49,000 products.
Background and Operations — As a top distributor and service provider to the OEM market, Gexpro Services has approximately 3,300 suppliers offering approximately 53,000 products. These products are inventoried and sourced through 32 locations in North America, South America, Asia, Europe and the Middle East.
Removed
A summary of the mergers is presented in Note 1 – Nature of Operations and Basis of Presentation, in Item 8. Financial Statements and Supplementary Data.
Added
On April 1, 2022, DSG, which at the time already owned Lawson, acquired TestEquity and Gexpro Services, in transactions in which TestEquity and Gexpro Services were merged with and into subsidiaries of DSG, with Lawson, TestEquity and Gexpro Services surviving as wholly-owned subsidiaries of DSG, and in connection with which DSG issued shares of DSG common stock to the former equityholders of TestEquity and Gexpro Services in exchange for their equity interests in TestEquity and Gexpro Services (“the Mergers”).
Removed
Recent Events 2024 Business Acquisitions On November 18, 2024, DSG acquired the assets of ConRes Test Equipment, (“ConRes TE” and the “ConRes TE Transaction” ). These assets were acquired to expand TestEquity’s test equipment offerings and value-add service capabilities in all of our end markets.
Added
Share Repurchase Increase In November 2025, the Board authorized a $30.0 million increase to the Company’s existing stock repurchase program for shares of DSG common stock. As a result of the additional authorization, the aggregate repurchase authorization under the Company’s repurchase program for shares of DSG common stock increased from $37.5 million to $67.5 million.
Removed
The total purchase consideration exchanged was approximately $17.0 million and was funded using DSG’s cash on hand and its revolving credit facility. On October 30, 2024, DSG completed the acquisition of Tech-Component Resources Pte Ltd (“TCR” and the “TCR Transaction”). TCR is a distributor of fasteners, mechanical components, and other industrial products in Southeast Asia.
Added
T he remaining availability for stock repurchases under the stock repurchase program was $32.9 million at December 31, 2025.
Removed
TCR was acquired to provide us with a strategic foothold in this growing region. The total purchase consideration exchanged was approximately $5.9 million , net of cash acquired of $1.9 million, and was funded using DSG’s cash on hand and its revolving credit facility .
Added
Products — Lawson’s revenue percentages by product categories in 2025 were as follows: Product Category Percentage of Lawson Revenue Aftermarket automotive supplies 21% Fastening systems 16% Fluid power 14% Electrical 10% Specialty chemicals 10% Cutting tools and abrasives 8% Safety 6% Welding and metal repair 1% Other 14% 100% Lawson offers over 226,000 different products of which over 92,000 products are maintained in distribution centers.
Removed
On August 14, 2024, DSG acquired all of the issued and outstanding capital stock of Source Atlantic Limited (“Source Atlantic” and the “Source Atlantic Transaction”). Source Atlantic, headquartered in Saint John, New Brunswick, Canada, is a wholesale distributor of industrial MRO supplies, safety products, fasteners, and related value-add services for the Canadian MRO market.
Added
Background and Operations — Based out of North Richland Hills, Texas, TestEquity is a large, comprehensive provider of electronic test solutions in the United States supporting the aerospace and defense, wireless and communication, semiconductors, industrial electronics and automotive, and electronics manufacturing industries. TestEquity designs, rents and sells a full line of high-quality environmental test chambers.
Removed
Source Atlantic was acquired to expand DSG’s operating footprint in the Canadian market. The total purchase consideration exchanged was $103.1 million, net of cash acquired of $4.4 million . DSG funded the Source Atlantic Transaction with borrowings under its amended and restated credit facility (discussed below). On May 1, 2024 , DSG completed the acquisition of S&S Automotive Inc.
Added
Techni-Pro is TestEquity’s private label brand offering dependable, value-focused tools, test accessories, and production supplies that provide customers with practical alternatives to national brands. Techni-Tool is one of the industry’s largest solder, soldering equipment and electronic production distributors. Techni-Tool offers a wide range of products to support electronic production as well as compliance testing.
Removed
(“S&S Automotive” and the “S&S Automotive Transaction”). 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.
Added
In particular, TestEquity strives to improve its digital experience, with a consistent approach for all of its brands.
Removed
The total purchase consideration exchanged was approximately $80.1 million, net of cash acquired of $0.7 million, and was funded using DSG’s cash on hand and its revolving credit facility. On January 19, 2024, DSG acquired the assets of Safety Supply Illinois LLC, conducting business as Emergent Safety Supply (“ESS” and the “ESS Transaction”) .
Added
Canada Branch Division’s largest customer accounted for approximately 5% of consolidated revenue. Approximately 100% of Canada Branch Division’ s revenue was generated in Canada.
Removed
ESS is a national distributor of safety products based near Chicago in Batavia, 5 Illinois. ESS was acquired to expand Lawson’s safety product category. The total purchase consideration exchanged was $9.9 million and was funded using DSG’s cash on hand. Refer to Note 3 – Business and Asset Acquisitions in Item 8.
Added
Products — Canada Branch Division’s revenue percentages by product categories in 2025 were as follows: Product Category Percentage of Canada Branch Division Revenue Safety 17% Fasteners 14% Plumbing 10% Mobile valve 10% Tools and equipment 9% Industrial - Other 8% Machine 6% Cutting tools and abrasives 5% Power transmission 5% Engineering 3% Other 13% 100% Canada Branch Division offers over 85,000 different products of which approximately 53,700 products are maintained in distribution centers and physical store branch locations.
Removed
Financial Statements and Supplementary Data for additional information about these acquisitions. Debt Amendment On August 14, 2024, the Company entered into the Third Amendment to Amended and Restated Credit Agreement (the “Third Amendment”).
Added
Lanuza 54 2022 President and Chief Executive Officer, Lawson Products, Inc. Robert H. Connors 61 2019 President and Chief Executive Officer, Gexpro Services Barry Litwin 59 2025 President and Chief Executive Officer, Test Equity David S.
Removed
The Third Amendment provided for an additional $200 million incremental term loan and a $55 million increase in the Company’s senior secured revolving credit facility and permits the Company to increase the commitments under the agreement from time to time by up to $300 million in the aggregate, subject to, among other things, receipt of additional commitments from existing and/or new lenders and pro forma compliance with certain financial covenants.
Added
Lanuza served as Chief Executive Officer and Director of Jon-Don, LLC from September 2018 through April 2022. Mr. Connors has served as President and Chief Executive Officer of Gexpro Services since 2019. Mr. Litwin has served as President and Chief Executive Officer of Test Equity since July 2025. Prior to joining the Company, Mr.
Removed
Segments In connection with the Source Atlantic Transaction in the third quarter of 2024, the Company realigned its reportable segments to align with our business strategy and the manner in which our chief operating decision maker (“CODM”) assesses performance and strategic execution and makes decisions regarding the allocation of resources.
Added
Litwin served as Chief Executive Officer of Global Industrial Company, an industrial and MRO distribution company, publicly traded on the NYSE from January 2019 through August 2024. Mr. Lambert has served as Vice President, Controller and Chief Accounting Officer of the Company since June 2021. Prior to joining the Company, Mr.
Removed
The Company now has four reporting segments: Lawson, TestEquity, Gexpro Services and Canada Branch Division. For additional details about our segment realignment, see Note 1 – Nature of Operations and Basis of Presentation in Item 8. Financial Statements and Supplementary Data. 6 The following is a discussion of our reportable segments.
Removed
TestEquity designs, rents and sells a full line of high-quality environmental test chambers. In addition to a large array of test and measurement products, TestEquity also offers calibration, refurbishment and rental solutions and a wide range of refurbished products.
Removed
TEquipment (acquired as Interworld Highway, LLC) is one of the top distributors for both test and measurement and electronic production supplies in the United States with its e-commerce focused strategy, broad product range, amplified by access to core TestEquity products, and strong technical support for their customers.

… 1 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+20 added−20 removed74 unchanged
Biggest changeThe loss of certain key executives and managers or the failure to attract and develop talented employees could have a material adverse effect on our business, financial condition and results of operations. 16 Table of Contents There may be difficulties in integrating certain operations of TestEquity’s and Gexpro Services’ respective businesses with our other operations, and the failure to successfully combine those operations within our expected timetable could adversely affect our future results and the market price of our common stock.
Biggest changeThe loss of certain key executives and managers or the failure to attract and develop talented employees could have a material adverse effect on our business, financial condition and results of operations.
Those vendors have typically looked to pass their higher costs along to us through price increases. If we are unable to fully pass any such increased prices and costs through to our customers or to modify our activities, the impact could have an adverse effect on our operating profit margins and financial condition.
Those vendors have typically looked to pass their higher costs along to us through price increases. If we are unable to fully pass along any such increased prices and costs through to our customers or to modify our activities, the impact could have an adverse effect on our operating profit margins and financial condition.
Changes in trade policies, increases in or continuation of any tariffs or imposition of any new tariffs, and other inflationary pressures could also affect our sourcing of product and ability to secure sufficient product and/or impact the cost or price of our products, with potentially negative impacts on our reported gross profits and results of operations.
Changes in trade policies, increases in or continuation of any tariffs or imposition of any new tariffs, and other inflationary pressures could also affect our sourcing of products and ability to secure sufficient products and/or impact the cost or price of our products, with potentially negative impacts on our reported gross profits and results of operations.
In addition, as a result of this concentrated ownership interest of DSG common stock, DSG believes that it qualifies as a “controlled company.” Under Nasdaq Listing Rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and, accordingly, DSG believes that, if it so desired, it would be generally exempt from the requirements of Rule 5605(b), (d) and (e) of the Nasdaq Listing Rules that among other things would otherwise require DSG to have: • a majority of the DSG Board of Directors comprised of independent directors; • a compensation committee comprised solely of independent directors; and • director nominees be selected or recommended to the DSG Board of Directors for selection, either by (1) DSG’s independent directors constituting a majority of the DSG Board of Directors’ independent directors in a vote in 20 Table of Contents which only independent directors participate or (2) a nominating committee comprised solely of independent directors.
In addition, as a result of this concentrated ownership interest of DSG common stock, DSG believes that it qualifies as a “controlled company.” Under Nasdaq Listing Rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and, accordingly, DSG believes that, if it so desired, it would be generally exempt from the requirements of Rule 5605(b), (d) and (e) of the Nasdaq Listing Rules that among other things would otherwise require DSG to have: • a majority of the DSG Board of Directors comprised of independent directors; • a compensation committee comprised solely of independent directors; and • director nominees be selected or recommended to the DSG Board of Directors for selection, either by (1) DSG’s independent directors constituting a majority of the DSG Board of Directors’ independent directors in a vote in which only independent directors participate or (2) a nominating committee comprised solely of independent directors.
During the normal course of business we receive, retain and transmit certain confidential information that our customers provide to purchase products or services or to otherwise communicate with us, as well as certain potentially sensitive information about our employees and other persons and entities. 15 Table of Contents Our technologies, systems, networks and data and information processes (and those of our business partners) have been, and may in the future be, the target of cyber-attacks and/or information security incidents that may have resulted in, or may in the future result in, the unauthorized release, misuse, loss or destruction of proprietary, personal and other information, or other disruption of our business operations, including compromise of our email systems.
During the normal course of business we receive, retain and transmit certain confidential information that our customers provide to purchase products or services or to otherwise communicate with us, as well as certain potentially sensitive information about our employees and other persons and entities. 14 Table of Contents Our technologies, systems, networks and data and information processes (and those of our customers, suppliers and other business partners) have been, and may in the future be, the target of cyber-attacks and/or information security incidents that may have resulted in, or may in the future result in, the unauthorized release, misuse, loss or destruction of proprietary, personal and other information, or other disruption of our business operations, including compromise of our email systems.
We depend on our information and communication systems to process orders, purchase and manage inventory, maintain cost-effective operations, sell and ship products, manage accounts receivable collections and serve our customers. Disruptions in the operation of information and communication systems can occur due to a variety of factors including power outages, hardware failure, programming faults and human error.
We depend on our information and communication systems to process orders, purchase and manage inventory, maintain cost-effective operations, sell and ship products, manage accounts receivable collections and serve our customers. Disruptions in the operation of information and communication systems can occur due to a variety of factors including power outages, hardware failure, programming faults, cyber incidents and human error.
Cyber-attacks or other information security incidents could have a material adverse effect on our business strategy, results of operations or financial condition and subject us to additional legal costs. We are increasingly dependent on digital technology to process and record financial and operating data and communicate with our employees and business partners.
Cyber-attacks or other information security incidents could have a material adverse effect on our business strategy, results of operations or financial condition and subject us to additional legal costs. We are increasingly dependent on digital technology to process and record financial and operating data and communicate with our employees, customers, suppliers and other business partners.
While we instituted various price increases during 2022, 2023 and 2024 in response to rising supplier costs, as well as increased transportation and labor costs, there can be no assurance that future cost increases can be partially or fully passed on to customers, or that the timing of such sales price increases will match our supplier cost increases.
While we instituted various price increases during 2023, 2024 and 2025 in response to rising supplier costs, as well as increased transportation and labor costs, there can be no assurance that future cost increases can be partially or fully passed on to customers, or that the timing of such sales price increases will match our supplier cost increases.
Changes that affect governmental and other tax-supported entities, including but not limited to changes arising from geopolitical instability and military hostilities, could negatively impact our revenue and earnings. 17 Table of Contents A portion of our revenue is derived from the United States military and other governmental and tax-supported entities.
Changes that affect governmental and other tax-supported entities, including but not limited to changes arising from geopolitical instability and military hostilities, could negatively impact our revenue and earnings. 16 Table of Contents A portion of our revenue is derived from the United States military and other governmental and tax-supported entities.
If we are not able to fully realize the anticipated savings and synergies from the Mergers in a timely manner, or the cost to achieve these synergies is greater than expected, we may not fully realize the anticipated benefits (or any benefits) of the Mergers, or it may take longer than expected to realize any benefits.
If we are not able to fully realize the anticipated savings and synergies from the acquisitions in a timely manner, or the cost to achieve these synergies is greater than expected, we may not fully realize the anticipated benefits (or any benefits) of the acquisitions, or it may take longer than expected to realize any benefits.
Any borrowings in Canadian dollars or any other foreign currency would expose us to market risk relating to the change in the value of such foreign currency in relation to the U.S. dollar. 24 ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
Any borrowings in Canadian dollars or any other foreign currency would expose us to market risk relating to the change in the value of such foreign currency in relation to the U.S. dollar. 22 ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
Legal and Regulatory Risks A violation of federal, state or local environmental protection regulations could lead to significant penalties and fines or other remediation costs. Our product offerings include a wide variety of industrial chemicals and other products which are subject to a multitude of federal, state and local regulations.
Legal and Regulatory Risks 19 Table of Contents A violation of federal, state or local environmental protection regulations could lead to significant penalties and fines or other remediation costs. Our product offerings include a wide variety of industrial chemicals and other products which are subject to a multitude of federal, state and local regulations.
Such government efforts, along with other interest rate pressures, could lead to higher financing costs and have material adverse effect on our business, financial condition and results of operations. Common Stock Risks The market price of our common stock may decline.
Such government efforts, or other interest rate pressures, could lead to higher financing costs and have material adverse effect on our business, financial condition and results of operations. Common Stock Risks The market price of our common stock may decline.
In addition, from time to time our email systems (and those of our business partners communicating with us) have been subjected to malicious attacks, including phishing attacks. Such attacks or incidents could have a material adverse effect on our business strategy, results of operations or financial condition and subject us to additional legal costs.
For example, from time to time our email systems (and those of our customers, suppliers and other business partners communicating with us) have been subjected to malicious attacks, including phishing attacks. Such attacks or incidents could have a material adverse effect on our business strategy, results of operations or financial condition and subject us to additional legal costs.
For example, the COVID-19 pandemic resulted in lost revenue to our Company and adversely affected our financial condition and results of operations by, among other things, limiting our ability to source high demand product, limiting our sales force to perform certain functions due to state or federal stay-at-home orders, causing a slow-down of customer demand for our products and limiting the ability of some customers to pay us on a timely basis. 22 Table of Contents General Risks Our results of operations may be adversely impacted by a downturn in the economy or in certain sectors of the economy.
For example, the COVID-19 pandemic resulted in lost revenue to our Company and adversely affected our financial condition and results of operations by, among other things, limiting our ability to source high demand product, limiting our sales force to perform certain functions due to state or federal stay-at-home orders, causing a slow-down of customer demand for our products and limiting the ability of some customers to pay us on a timely basis.
An increase or decrease of tax related to tax examination resolutions could result in a change in our income tax expense and could negatively impact our financial condition and results of operations. Our international operations subject us to additional legal and regulatory regimes.
An increase or decrease of tax related to tax examination resolutions could result in a change in our income tax expense and could negatively impact our financial condition and results of operations. Our international operations subject us to additional legal and regulatory regimes. We have business operations and/or sales in a number of foreign countries.
We have $739.9 million of indebtedness as of December 31, 2024, which includes a significant amount of indebtedness under our Amended Credit Agreement (as defined in Note 9 – Debt in Item 8. Financial Statements and Supplementary Data ).
We had $704.4 million of indebtedness as of December 31, 2025, which includes a significant amount of indebtedness under our Amended Credit Agreement (as defined in Note 9 – Debt in Item 8. Financial Statements and Supplementary Data ).
However, there are risks associated with pursuing acquisitions, which include the incurrence of significant transaction costs without the guarantee that such transactions will be completed and the risk that we may not realize the anticipated benefits of the acquisition once it is completed.
However, there are risks associated with pursuing acquisitions, which include the incurrence of significant transaction costs without the guarantee that such transactions will be completed and the risk that we may not realize the anticipated benefits of the acquisition once it is completed. Many of the businesses we acquire involve the combination of businesses that previously operated as independent businesses.
As of December 31, 2024 , we were subject to U.S. federal income tax examinations for the years 2021 through 2023 and income tax examinations from various other jurisdictions for the years 2017 through 2023.
As of December 31, 2025 , we were subject to U.S. federal income tax examinations for the years 2022 through 2024 and income tax examinations from various other jurisdictions for the years 2018 through 2024.
Failure to retain a sufficient number of talented, experienced and productive sales representatives could adversely affect our business, financial condition and results of operations. Failure to retain talented employees, managers and executives could negatively impact our business and operating results.
Failure to retain a sufficient number of talented, experienced and productive sales representatives could adversely affect our business, financial condition and results of operations.
Based on a Schedule 13D filed with the SEC by LKCM and various other persons and entities (as amended through December 27, 2023 ), entities affiliated with LKCM beneficially owned in the aggregate approximately 36.4 million shares of DSG common stock as of December 26, 2023, representin g approximately 77.6% of the outstanding shares of DSG common stock as of December 31, 2024.
Based on a Schedule 13D filed with the SEC by LKCM and various other persons and entities (as amended through February 12, 2025 ), entities affiliated with LKCM beneficially owned in the aggregate approximately 36.4 million shares of DSG common stock as of February 12, 2025, representin g approximately 78.7% of the outstanding shares of DSG common stock as of December 31, 2025.
We expect to fund these investments from cash generated from operations and borrowings available under our Amended Credit Agreement. Failure to generate sufficient cash flow from operations or from our Amended Credit Agreement could cause us to have insufficient funds to operate our business. Adequate funds may not be available when needed or may not be available on favorable terms.
We expect to fund these investments from cash generated from operations and borrowings available under our Amended Credit Agreement . Failure to generate sufficient cash flow from operations or from our Amended Credit Agreement could cause us to have insufficient funds to operate our business.
These environmental protection laws change frequently and affect the composition, handling, transportation, storage and disposal of these products. Failure to comply with these regulations could lead to severe penalties and fines for each violation.
These environmental protection laws change frequently and affect the composition, handling, transportation, storage and disposal of these products. Failure to comply with these regulations could lead to severe penalties and fines for each violation. Our results of operations could be affected by changes in taxation.
In addition, geopolitical instability and military hostilities, such as the Hamas-Israel military conflict and the Russia-Ukraine military conflict, could negatively impact our business Although we have not, do not currently and do not plan to conduct business operations in Gaza, Israel, Russia, Belarus, or Ukraine, it is not possible to predict the broader consequences of these conflicts, which could include sanctions, embargoes or other geopolitical instability.
Although we have not, do not currently and do not plan to conduct business operations in Russia, Belarus, Ukraine or Venezuela, it is not possible to predict the broader consequences of these conflicts, which could include sanctions, embargoes or other geopolitical instability.
Government entities may continue their efforts, or implement additional efforts, to combat inflation, which could include among other things raising interest rate benchmarks, maintaining interest rate benchmarks at elevated levels and/or failing to lower interest rate benchmarks.
If there is an increase in inflation, government entities may implement efforts to combat such increase in inflation, which could include, among other things, raising interest rate benchmarks, maintaining interest rate benchmarks at elevated levels and/or failing to lower interest rate benchmarks.
As a result of the Mergers, DSG’s ability to use its net operating losses and certain other tax attributes generated prior to the Mergers may be subject to limitations , which may adversely impact on our future tax liability and cash flows .
Our ability to use our net operating losses and certain other tax attributes may be subject to limitations , which may adversely impact on our future tax liability and cash flows .
Our competitors include large and small companies with similar or greater market presence, name recognition, and financial, marketing, and other resources. We believe the competition will continue to challenge our business with their product selection, financial resources and services. We may be required to recognize impairment charges for goodwill and other intangible assets.
We believe the competition will continue to challenge our business with their product selection, financial resources and services. We may be required to recognize impairment charges for goodwill and other intangible assets.
Our results of operations could be affected by changes in taxation. We are subject to income taxation at federal and state levels in the United States and to income taxation in numerous non-U.S. jurisdictions.
We are subject to income taxation at federal and state levels in the United States and to income taxation in numerous non-U.S. jurisdictions.
Our business, financial condition and operating results could be materially adversely affected if we failed to meet the covenant requirements of our Amended Credit Agreement. 19 Table of Contents Our Amended Credit Agreement contains financial and other restrictive covenants.
Adequate funds may not be available when needed or may not be available on favorable terms. Our business, financial condition and operating results could be materially adversely affected if we failed to meet the covenant requirements of our Amended Credit Agreement. Our Amended Credit Agreement contains financial and other restrictive covenants.
Changes in applicable tax laws and regulations could affect our ability to realize our deferred tax assets, which could adversely affect our results of operations. 21 Table of Contents From time to time we may become subject to income tax audits, sales tax audits or similar proceedings, and as a result we may incur additional costs and expenses or owe additional taxes, interest and penalties that may negatively impact our operating results.
From time to time we may become subject to income tax audits, sales tax audits or similar proceedings, and as a result we may incur additional costs and expenses or owe additional taxes, interest and penalties that may negatively impact our operating results.
Our success depends on, among other things, our ability to attract, develop and retain talented employees, including executives and other key managers.
Failure to retain talented employees, managers and executives could negatively impact our business and operating results. 15 Table of Contents Our success depends on, among other things, our ability to attract, develop and retain talented employees, including executives and other key managers.
We may fail to successfully identify the right opportunities and/or to successfully integrate the acquired businesses, operations, technologies, systems and/or personnel with those of DSG, which could adversely affect our business, financial condition and results of operations. We operate in highly competitive markets. The marketplaces in which we operate are highly competitive.
If we fail to successfully identify the right opportunities and/or to successfully integrate the acquired businesses, operations, technologies, systems and/or personnel with those of DSG, or if any significant business activities are interrupted as a result of this process, this could adversely affect our business, financial condition and results of operations.
J. Bryan King, Chairman and Chief Executive Officer of the Company, is a Principal of LKCM. In addition, M.
J. Bryan King, Chairman and Chief Executive Officer of the Company, is a Principal of LKCM. In addition, M. Bradley Wallace, a director of the Company, is a Founding Partner of LKCM Headwater Investments, the private capital investment group of LKCM.
At December 31, 2024 , the Company had $21.4 million of U.S. federal net operating loss carryforwards which were generated after 2017 and are not subject to expiration and $50.6 million of various state net operating loss carryforwards which expire at varying dates between 2025 and 2036.
Our ability to use our net operating losses and certain other tax attributes may be subject to limitations. 20 Table of Contents At December 31, 2025 , the Company had $21.4 million of U.S. federal net operating loss carryforwards which were generated after 2017 and are not subject to expiration and $85.2 million of various state net operating loss carryforwards which expire at varying dates between 2026 and 2037.
In ac cordance with generally accepted accounting principles in the United States (“GAAP”), our management periodically assesses our goodwill and other intangible assets to determine if they are impaired.
As a result of our acquisitions , we have recorded a significant amount of goodwill and other intangible assets on our consolidated balance sheet as of December 31, 2025. In ac cordance with generally accepted accounting principles in the United States (“GAAP”), our management periodically assesses our goodwill and other intangible assets to determine if they are impaired.
During this process, if our management identifie s one or more material weaknesses in our internal control over financial reporting, we will be unable to assert such internal control is effective.
During this process, if our management identifie s one or more material weaknesses in our internal control over financial reporting, we will be unable to assert such internal control is effective. Ensuring that we have adequate internal financial and accounting controls and procedures in place is a costly and time-consuming exercise that needs to be re-evaluated frequently.
The Mergers involve the combination of businesses that previously operated as independent businesses. Management has devoted and will continue to devote significant attention and resources to combine certain business operations of TestEquity and Gexpro Services with our other business operations.
Management has devoted and will continue to devote significant attention and resources to combine the business operations of acquired businesses with our other business operations.
Therefore, we are exposed to market risk relating to the fluctuation of value of such foreign currencies (including the Canadian dollar, Mexican peso, British pound sterling, the Euro, Danish krone, Brazilian real, Chinese renminbi, Turkish lira, and Singapore dollar) relative to the U.S. dollar that could adversely affect our financial condition and operating results. 23 Table of Contents In addition, t he revolving credit facility under our Amended Credit Agreement is available to be drawn in U.S. dollars, Canadian dollars and any other additional currencies that may be agreed between us and our lenders.
Therefore, we are exposed to market risk relating to the fluctuation of value of such foreign currencies (including the Canadian dollar, Mexican peso, British pound sterling, the Euro, Danish krone, Brazilian real, Chinese yuan, Turkish lira, Indian rupee, Malaysian ringgit, Indonesian rupiah and Singapore dollar) relative to the U.S. dollar that could adversely affect our financial condition and operating results.
Any failure to maintain effective internal controls over financial reporting or to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and applicable SEC rules could also potentially subject us to sanctions or investigations by the SEC, Nasdaq or other regulatory authorities. 18 Table of Contents The changes made in the third quarter of 2024 to our segment reporting structure could be confusing to investors and may not have the desired effects.
Any failure to maintain effective internal controls over financial reporting or to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and applicable SEC rules could also potentially subject us to sanctions or investigations by the SEC, Nasdaq or other regulatory authorities. 17 Table of Contents Debt Financing Risks We have a significant amount of indebtedness, and our significant indebtedness could adversely affect our business, financial condition and results of operations.
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 As a result, LKCM has significant influence over the outcome of matters requiring a stockholder vote, including the election of directors and the approval of other significant matters, and LKCM’s interests may not align with the interests of other stockholders.
As a result, LKCM has significant influence over the outcome of matters requiring a stockholder vote, including the election of directors and the approval of other significant matters, and LKCM’s interests may not align with the interests of other stockholders.
Any decline or uncertainty in the strength of the economy may lead to a decrease in customer spending and may cause certain customers to cancel or delay placing orders. Some of our customers may file for bankruptcy protection, preventing us from collecting on accounts receivable and may result in our stocking excess inventory.
Some of our customers may file for bankruptcy protection, preventing us from collecting on accounts receivable and may result in our stocking excess inventory.
Government efforts to combat inflation, along with other interest rate pressures, could lead to higher financing costs. Inflation has risen on a global basis, the United States has been experiencing relatively high levels of inflation, and government entities have taken various actions to combat inflation, such as raising interest rate benchmarks.
Government efforts to combat inflation, or other interest rate pressures, could lead to higher financing costs. 18 Table of Contents The global macroeconomic environment has experienced challenges in recent years, including high rates of inflation. In response, government entities have taken various actions to combat inflation, such as raising interest rate benchmarks.
In addition, we are exposed to growing and evolving risks arising from the use of Artificial Intelligence technologies by bad actors to commit fraud, misappropriate funds and facilitate cyberattacks.
In addition, we are exposed to growing and evolving risks arising from the use of AI technologies by bad actors to commit fraud, misappropriate funds and facilitate cyberattacks. As cyber threats continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and fix any information security vulnerabilities.
As cyber threats continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and fix any information security vulnerabilities. We maintain and have access to data and information that is subject to privacy and security laws, data protection laws and applicable regulations.
We maintain and have access to data and information that is subject to privacy and security laws, data protection laws and applicable regulations.
If there are limitations in the acquired businesses’ financial organization, reporting and controls, or if we are unable to effectively integrate their financial reporting processes with our financial reporting processes, we could, among other things, have material weaknesses in our internal controls, violate our indebtedness covenants, miss an SEC reporting deadline or otherwise fail to comply with an applicable law or regulation.
Limitations in the acquired businesses’ financial organization, reporting and controls, or an inability to effectively integrate their financial reporting processes with our financial reporting processes, has in the past resulted in, and may in the future lead to, material weaknesses in our internal controls.
Failure to successfully manage the implementation of these changes could lead to disruptions in our operations. Any pursuit or completion by DSG of additional acquisition opportunities would involve risks that could adversely affect our business, financial condition and results of operations. One of our growth strategies is to actively pursue additional acquisition opportunities which complement our business model.
There may be difficulties in integrating certain operations of businesses we acquire with our other operations, and the failure to successfully combine those operations within our expected timetable could adversely affect our future results and the market price of our common stock. One of our growth strategies is to actively pursue additional acquisition opportunities which complement our business model.
Removed
For example, in February 2022, Lawson became aware that its computer network was the subject of a cyber incident potentially involving unlawful access (the “Cyber Incident”).
Added
The increased use of AI may impact our industry and the markets in which we compete, and the development and use of AI presents potential competitive and other risks. We have begun incorporating AI capabilities into our business. We have also increased our investments in developing, managing and implementing AI for our business.
Removed
Because of the nature of the information that may have been potentially compromised, which may have included personal identifiable information and protected health information, we were required to notify the parties whose information was potentially compromised of the incident as well as various governmental agencies and have taken other actions, such as offering credit monitoring services.
Added
The increased use of AI may have a significant impact on customer demand and market dynamics in our industry and there may be a need to increase the rate of adoption of AI to maintain competitiveness.
Removed
After this incident, we also reviewed our overall systems and processes, and implemented certain changes, including employee training, designed to improve our overall cybersecurity program, but we cannot assure you that these changes will be effective to prevent future incidents.
Added
AI presents risks, challenges, and unintended consequences that could affect its rate and success of adoption, and therefore our business, and there is no assurance that our use of AI or incorporation of AI capabilities into our business will benefit our business.
Removed
For example, a putative class action lawsuit was filed against DSG in April 2023 asserting a variety of claims seeking monetary damages, injunctive relief and other related relief in connection with the Cyber Incident, which could result in additional legal and other costs.
Added
If we fail to use AI to improve our operations as anticipated or as well as our competitors, this could have a materially adverse impact on our business strategy, results of operations or financial condition.
Removed
If our management is not able to effectively manage the process following the closing of the Mergers, or if any significant business activities are interrupted as a result of this process, our businesses could suffer. Furthermore, it is possible that the Mergers could result in the loss of key employees.
Added
In addition, any use of AI by us in a manner that is not in compliance with applicable law or any of our contractual or other obligations could also lead to regulatory or legal action, potential liability, loss of business, and other negative effects that could have a materially adverse impact on our business strategy, results of operations or financial condition.
Removed
As a result of the closing of the Mergers on April 1, 2022, and other acquisitions completed during 2024, 2023 and 2022 , we have a significant amount of goodwill and other intangible assets on our consolidated balance sheet as of December 31, 2024.
Added
Furthermore, it is possible that following an acquisition, the business acquired could lose key employees.
Removed
For example, management’s report on our internal controls over financial reporting contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, identified a material weakness and concluded that we did not maintain effective internal controls over financial reporting as of December 31, 2022.
Added
Failure to successfully manage the implementation of these changes could lead to disruptions in our operations. We operate in highly competitive markets. The marketplaces in which we operate are highly competitive. Our competitors include large and small companies with similar or greater market presence, name recognition, and financial, marketing, and other resources.
Removed
Ensuring that we have adequate internal financial and accounting controls and procedures in place is a costly and time-consuming exercise that needs to be re-evaluated frequently.
Added
In addition, geopolitical instability and military hostilities, such as the Russia-Ukraine military conflict and United States military operations in Venezuela, could negatively impact our business.
Removed
In the third quarter of 2024 we introduced a fourth reporting segment, Canada Branch Division, which includes the results of Bolt Supply House (“Bolt”) and Source Atlantic. Prior to this change, we had three reportable segments: Lawson, TestEquity and Gexpro Services.
Added
These limitations could also lead to a violation of our indebtedness covenants or cause us to miss an SEC reporting deadline or otherwise fail to comply with an applicable law or regulation.
Removed
We also had an “All Other” category which included unallocated DSG holding company costs and the results of Bolt, which was previously a non-reportable segment. Managing this change has required, and may continue to require, significant expenditures and allocation of valuable management resources.
Added
The OECD reached agreement among over 140 countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Although the U.S. has not yet enacted legislation to adopt Pillar Two, certain countries in which we operate have already adopted, or are in the process of adopting, legislation to implement Pillar Two.
Removed
We have provided disclosures about our new segment reporting structure, but there is no guarantee that investors or the market will understand this change to our financial reporting. There is also no guarantee that this change will have the desired effect.
Added
For the year ended December 31, 2025 , the Company determined that there was no material impact on our tax provision as a result of Pillar Two. The Company continues to monitor U.S. and global legislative action related to Pillar Two for potential impacts.
Removed
Failure of investors or analysts to understand our revised segment reporting structure may negatively affect their ability to understand our business and operating results which could adversely affect our stock price. Debt Financing Risks We have a significant amount of indebtedness, and our significant indebtedness could adversely affect our business, financial condition and results of operations.
Added
In addition, changes in applicable tax laws and regulations could affect our ability to realize our deferred tax assets, which could adversely affect our results of operations.
Removed
Additionally, a facility we own in Decatur, Alabama, was found to contain hazardous substances in the soil and groundwater as a result of historical operations prior to our ownership. We retained an environmental consulting firm to further investigate the contamination, including measurement and monitoring of the site.
Added
General Risks Our results of operations may be adversely impacted by a downturn in the economy or in certain sectors of the economy. Any decline or uncertainty in the strength of the economy may lead to a decrease in customer spending and may cause certain customers to cancel or delay placing orders.
Removed
The Company concluded that further remediation was required, and accordingly, has made an accrual for the estimated cost of this environmental matter. A remediation plan was approved by the Alabama Department of Environmental Management and the remediation of the affected area is ongoing. Additional procedures may be required that could negatively impact our business, financial condition and results of operations.
Added
Enhanced tariffs, changes in trade policies and changes in import and export regulations of U.S. and foreign governments may have a negative effect on global economic conditions, financial markets and our cost of goods, which may result in lower operating margins. 21 Table of Contents There is currently significant uncertainty about the future relationship between the United States and various other countries with respect to trade policies, treaties, tariffs and taxes.
Removed
On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax rules, which contemplate a 15% minimum tax rate. The OECD continues to release additional guidance on these rules and the framework calls for law enactment by OECD and G20 members to take effect in 2024 or 2025.
Added
For example, the U.S. presidential administration has threatened or imposed new or increased tariffs on imports from various countries, including China, Mexico and Canada. These actions have resulted in and are expected to continue to result in retaliatory measures on U.S. goods.
Removed
However, the detail of the proposals is subject to change and the impact on the Company will need to be determined by reference to the final rules. The Company is continuing to monitor the potential impact of the Pillar Two proposals and developments on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules.
Added
If maintained, the tariffs and the potential escalation of trade disputes could pose a significant risk to our business and if we are unable to fully pass along any resulting increased prices and costs through to our customers or to modify our activities, the impact could have an adverse effect on our gross profit margins and financial condition.
Removed
Among the jurisdictions where the Company operates, the U.K. has enacted legislation during 2024 that becomes effective in 2025.Canada has also enacted legislation during 2024 in accordance with the Pillar Two framework. Other countries have also enacted or are expected to enact Pillar Two legislation.
Added
The extent and duration of the tariffs and the resulting impact on general economic conditions on our business are uncertain and depend on various factors, including negotiations between the United States and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.

… 6 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed12 unchanged
Biggest changeWe have not experienced any cybersecurity incidents in the last three years, including as a result of the Cyber Incident, that have materially affected the business strategy, results of operations, or financial condition of the Company.
Biggest changeWe have not experienced any cybersecurity incidents in the last four years that have materially affected the business strategy, results of operations, or financial condition of the Company.
Our CIOs have collectively over seventy years of service in various roles in the cybersecurity and information technology areas, including over forty years in their current roles or within the industry. 25 Table of Contents
Our CIOs have collectively over seventy years of service in various roles in the cybersecurity and information technology areas, including over forty years in their current roles or within the industry. 23 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−2 removed0 unchanged
Biggest changeNumber of Properties Lawson TestEquity Gexpro Services Canada Branch Division All Other (1) Offices 3 5 3 2 1 Distribution centers/warehouses 8 40 30 1 — Branch locations 5 — — 38 — Other (2) 1 — — — — Total 17 45 33 41 1 (1) Includes our principal executive office.
Biggest changeNumber of Properties Lawson TestEquity Gexpro Services Canada Branch Division All Other (1) Offices 2 5 3 2 1 Distribution centers/warehouses 7 41 32 1 — Branch locations 5 — — 35 — Other (2) 1 — — — — Total 15 46 35 38 1 (1) Includes our principal executive office.
ITEM 2. PROPERTIES. Our principal executive office is located in Fort Worth, Texas. As of December 31, 2024, we owned or leased multiple properties in the United States and abroad, including office spaces, distribution centers, warehouses and branch retail locations. Owned and leased properties by reportable segment as of December 31, 2024 are summarized below.
ITEM 2. PROPERTIES. Our principal executive office is located in Fort Worth, Texas. As of December 31, 2025, we owned or leased multiple properties in the United States and abroad, including office spaces, distribution centers, warehouses and branch retail locations. Owned and leased properties by reportable segment as of December 31, 2025 are summarized below.
(2) Unoccupied facility related to a discontinued business in a prior year. While we believe that our facilities are adequate to meet our current needs, we will continue to assess the location and operation of our facilities to determine whether they meet the strategic needs of our business. ITEM 3. LEGAL PROCEEDINGS.
(2) Unoccupied facility related to a discontinued business in a prior year. While we believe that our facilities are adequate to meet our current needs, we will continue to assess the location and operation of our facilities to determine whether they meet the strategic needs of our business.
Removed
See Note 15 – Commitments and Contingencies to our consolidated financial statements, included in Item 8. Financial Statements and Supplementary Data, which is hereby incorporated herein by reference, for a description of certain of our pending legal proceedings, which are hereby incorporated herein by reference.
Removed
In addition, the Company is involved in legal actions that arise in the ordinary course of business. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 26 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−0 removed2 unchanged
Biggest changeThe graph is based on historical data and is not necessarily indicative of future performance. 27 December 31, 2019 2020 2021 2022 2023 2024 DSG $ 100.00 $ 97.70 $ 105.11 $ 70.75 $ 121.15 $ 132.05 Russell 2000 Index 100.00 119.96 137.74 109.58 128.14 142.92 Peer Group 100.00 135.35 179.74 174.64 258.21 320.60 ITEM 6. [RESERVED] 28
Biggest changeThe graph is based on historical data and is not necessarily indicative of future performance. 25 December 31, 2020 2021 2022 2023 2024 2025 DSG $ 100.00 $ 107.58 $ 72.42 $ 124.01 $ 135.17 $ 107.62 Russell 2000 Index $ 100.00 $ 114.82 $ 91.35 $ 106.82 $ 119.14 $ 134.41 Peer Group $ 100.00 $ 132.79 $ 129.19 $ 191.05 $ 237.35 $ 255.47 ITEM 6. [RESERVED] 26
We did not declare or pay dividends in 2024, 2023 or 2022 and the Company currently has no plans to declare or pay dividends in the foreseeable future. Dividends are subject to certain restrictions based on terms detailed in our Amended Credit Agreement. Information about our equity compensation plans may be found in Item 12.
We did not declare or pay dividends in 2025, 2024 or 2023 and the Company currently has no plans to declare or pay dividends in the foreseeable future. Dividends are subject to certain restrictions based on terms detailed in our Amended Credit Agreement. Information about our equity compensation plans may be found in Item 12.
The following table summarizes repurchases of DSG common stock for the three months ended December 31, 2024 under the repurchase program described above and excludes shares withheld from employees to satisfy tax withholding requirements on option exercises and other equity-based transactions.
The following table summarizes repurchases of DSG common stock for the three months ended December 31, 2025 under the repurchase program described above and excludes shares withheld from employees to satisfy tax withholding requirements on option exercises and other equity-based transactions.
The graph assumes the value of the investment in our DSG common stock and each index was $100 at December 31, 2019 and all dividends paid by those companies included in the indices were reinvested.
The graph assumes the value of the investment in our DSG common stock and each index was $100 at December 31, 2020 and all dividends paid by those companies included in the indices were reinvested.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Stock Price Data The DSG common stock is traded on the Nasdaq Global Select Market under the symbol of DSGR. On February 28, 2025, the closing sales price of our common stock was $29.48 and the number of stockholders of record was 256.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Stock Price Data The DSG common stock is traded on the Nasdaq Global Select Market under the symbol of DSGR. On February 27, 2026, the closing sales price of our common stock was $29.90 and the number of stockholders of record was 238.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs October 1 through October 31, 2024 — $ — — $ — November 1 through November 30, 2024 — — — — December 1 through December 31, 2024 — — — — Total — — Stock Price Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent we specifically incorporate it by reference into such filing.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in millions) October 1 through October 31, 2025 58,501 $ 29.57 58,501 $ 4.6 November 1 through November 30, 2025 65,210 $ 26.59 65,210 $ 32.9 December 1 through December 31, 2025 — $ — — $ 32.9 Total 123,711 123,711 Stock Price Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent we specifically incorporate it by reference into such filing.
For additional information about our repurchases of DSG common stock, see Note 2 – Summary of Significant Accounting Policies and Note 11 – Stockholders’ Equity .
For additional information about our repurchases of DSG common stock, see Note 2 – Summary of Significant Accounting Policies and Note 11 – Stockholders’ Equity in Item 8. Financial Statements and Supplementary Data.
I n December 2023 the Board of Directors increased the repurchase program by $25.0 million, bringing the total authorized to $37.5 million. We had $26.4 million of remaining availability under the stock repurchase program as of December 31, 2024. T he stock repurchase program does not have an expiration date.
I n November 2025 the Board of Directors increased the repurchase program by $30.0 million, bringing the total authorized to $67.5 million. We had $32.9 million of remaining availability under the stock repurchase program as of December 31, 2025. T he stock repurchase program does not have an expiration date.
Added
This peer group was selected based on a review of publicly available information about these companies and our determination that they are primarily other small-cap industrial companies with a similar margin structure to that of the Company.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [RESERVED] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 54 Item 8. Financial Statements and Supplementary Data 56 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 106 Item 9A. Controls and Procedures 107 Item 9B.
Biggest changeItem 6. [RESERVED] 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8. Financial Statements and Supplementary Data 40 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 86 Item 9A. Controls and Procedures 87 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

79 edited+17 added−119 removed18 unchanged
Biggest changeReconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA (Unaudited) Year Ended December 31, 2024 (in thousands) Lawson TestEquity Gexpro Services Canada Branch Division All Other Consolidated Net income (loss) $ (7,332) Income tax expense (benefit) 6,796 Other income (expense), net 358 Change in fair value of earnout liabilities 988 Interest expense 55,145 Operating income (loss) $ 14,555 $ 3,967 $ 36,533 $ 6,024 $ (5,124) $ 55,955 Depreciation and amortization 24,349 30,799 15,489 3,739 — 74,376 Stock-based compensation (1) 4,132 433 — — 668 5,233 Severance and acquisition related retention expenses (2) 4,937 17,791 460 49 (1) 23,236 Acquisition related costs (3) 7,023 2,251 1,501 23 (656) 10,142 Inventory net realizable value adjustment (4) — — — — — — Inventory step-up (5) 1,066 — — 1,816 — 2,882 Other non-recurring (6) 337 1,047 1,792 — 257 3,433 Adjusted EBITDA $ 56,399 $ 56,288 $ 55,775 $ 11,651 $ (4,856) $ 175,257 33 Year Ended December 31, 2023 (in thousands) Lawson TestEquity Gexpro Services Canada Branch Division All Other Consolidated Net income (loss) $ (8,967) Income tax expense (benefit) 6,960 Other income (expense), net 2,982 Change in fair value of earnout liabilities (758) Interest expense 42,774 Operating income (loss) $ 32,498 $ (16,465) $ 27,000 $ 5,731 $ (5,773) $ 42,991 Depreciation and amortization 19,532 26,002 15,986 2,068 — 63,588 Stock-based compensation (1) 7,940 — — — — 7,940 Severance and acquisition related retention expenses (2) 476 23,949 238 3 — 24,666 Acquisition related costs (3) 3,015 6,215 1,081 — 1,250 11,561 Inventory net realizable value adjustment (4) — — — — — — Inventory step-up (5) — 3,582 — — — 3,582 Other non-recurring (6) 202 — 886 — 1,620 2,708 Adjusted EBITDA $ 63,663 $ 43,283 $ 45,191 $ 7,802 $ (2,903) $ 157,036 Year Ended December 31, 2022 (in thousands) Lawson (7) TestEquity Gexpro Services Canada Branch Division (7) All Other (7) Consolidated Net income (loss) $ 7,406 Income tax expense (benefit) 5,531 Other income (expense), net 670 Change in fair value of earnout liabilities 483 Loss on extinguishment of debt 3,395 Interest expense 24,301 Operating income (loss) $ 6,536 $ 11,375 $ 21,291 $ 4,614 $ (2,030) $ 41,786 Depreciation and amortization 10,594 17,480 15,175 1,937 — 45,186 Stock-based compensation (1) 2,448 — — — — 2,448 Severance and acquisition related retention expenses (2) 1,429 1,095 266 6 — 2,796 Acquisition related costs (3) 4,698 4,786 5,957 — — 15,441 Inventory net realizable value adjustment (4) 1,737 — — — — 1,737 Inventory step-up (5) 1,943 — 163 761 — 2,867 Other non-recurring (6) 1,199 — 354 — 44 1,597 Adjusted EBITDA $ 30,584 $ 34,736 $ 43,206 $ 7,318 $ (1,986) $ 113,858 (1) Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company’s stock price.
Biggest changeA reconciliation of Net income (loss) to Adjusted EBITDA by segment is not provided because management does not determine or review net income at the segment level and does not allocate non-operating costs and expenses to its segments, such as income taxes, interest expense, and various other non-operating income and expense. 29 Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA (Unaudited) Year Ended December 31, 2025 (in thousands) Lawson TestEquity Gexpro Services Canada Branch Division All Other Consolidated Net income (loss) $ 8,345 Income tax expense (benefit) 11,066 Other income (expense), net 2,500 Change in fair value of earnout liabilities 1,000 Interest expense 55,352 Operating income (loss) $ 18,763 $ 14,405 $ 48,811 $ 7,714 $ (11,430) $ 78,263 Depreciation and amortization 27,074 33,032 14,128 6,645 — 80,879 Stock-based compensation (1) 2,926 1,787 413 — 1,546 6,672 Severance and acquisition related retention expenses (2) 2,620 1,579 511 770 — 5,480 Acquisition related costs (3) 109 (178) (129) 329 34 165 Inventory step-up (4) — — — — — — Other non-recurring (5) 150 326 — 172 3,134 3,782 Adjusted EBITDA $ 51,642 $ 50,951 $ 63,734 $ 15,630 $ (6,716) $ 175,241 Year Ended December 31, 2024 (in thousands) Lawson TestEquity Gexpro Services Canada Branch Division All Other Consolidated Net income (loss) $ (7,332) Income tax expense (benefit) 6,796 Other income (expense), net 358 Change in fair value of earnout liabilities 988 Interest expense 55,145 Operating income (loss) $ 14,555 $ 3,967 $ 36,533 $ 6,024 $ (5,124) $ 55,955 Depreciation and amortization 24,349 30,799 15,489 3,739 — 74,376 Stock-based compensation (1) 4,132 433 — — 668 5,233 Severance and acquisition related retention expenses (2) 4,937 17,791 460 49 (1) 23,236 Acquisition related costs (3) 7,023 2,251 1,501 23 (656) 10,142 Inventory step-up (4) 1,066 — — 1,816 — 2,882 Other non-recurring (5) 337 1,047 1,792 — 257 3,433 Adjusted EBITDA $ 56,399 $ 56,288 $ 55,775 $ 11,651 $ (4,856) $ 175,257 (1) Expense (benefit) primarily for stock-based compensation, of which a portion varies with the Company’s stock price.
Lawson plans to continue concentrating its efforts on increasing the productivity and size of its sales team. Additionally, Lawson drives revenue through the expansion of products sold to existing customers as well as attracting new customers and additional ship- 30 to locations.
Lawson plans to continue concentrating its efforts on increasing the productivity and size of its sales team. Additionally, Lawson drives revenue through the expansion of products sold to existing customers as well as attracting new customers and additional ship-to locations.
While we were in compliance with our financial covenants as of December 31, 2024, failure to meet the covenant requirements of the Amended Credit Agreement in future quarters could lead to higher financing costs and increased restrictions, reduce or eliminate our ability to borrow funds, or accelerate the payment of our indebtedness and could have a material adverse effect on our business, financial condition and results of operations.
While we were in compliance with our financial covenants as of December 31, 2025, failure to meet the covenant requirements of the Amended Credit Agreement in future quarters could lead to higher financing costs and increased restrictions, reduce or eliminate our ability to borrow funds, or accelerate the payment of our indebtedness and could have a material adverse effect on our business, financial condition and results of operations.
These non-GAAP financial measures 32 should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
These non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
Canada Branch Division combines the operations of our Bolt and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, power tools and related value-add services to the Canadian MRO market through the sale of products and services via warehouse shipments and to its walk-up customers through 38 branch locations.
Canada Branch Division combines the operations of our Bolt and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, power tools and related value-add services to the Canadian MRO market through the sale of products and services via warehouse shipments and to its walk-up customers through 35 branch locations.
A summary of our segments is presented below. For additional details about our segments, see Item 1. Business and Note 14 – Segment Information in Item 8. Financial Statements and Supplementary Data. Lawson is a distributor of specialty products and services to the industrial, commercial, institutional and government MRO market.
A summary of our segments is presented below. For additional details about our segments, see Item 1. Business and Note 14 – Segment Information in Item 8. Financial Statements and Supplementary Data. Lawson is a distributor of specialty products and services to the industrial, commercial, institutional and government MRO marketplace.
Canada Branch Division Sales Drivers Canada Branch Division combines the operations of our Bolt and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, power tools and related value-add services to the Canadian MRO market through the sale of products and services via warehouse shipments and to its walk-up customers through 38 branch locations.
Canada Branch Division Sales Drivers 28 Canada Branch Division combines the operations of our Bolt and Source Atlantic subsidiaries, which distribute industrial MRO supplies, safety products, fasteners, power tools and related value-add services to the Canadian MRO market through the sale of products and services via warehouse shipments and to its walk-up customers through 35 branch locations.
Reconciliations of segment revenue and Operating income (loss) to our consolidated results of operations in the consolidated financial statements are provided in Note 14 – Segment Information within Item 8.
Reconciliations of segment revenue and Operating income (loss) to our consolidated results of operations in the consolidated financial statements are provided in Note 14 – Segment Information within Item 8. Financial Statements and Supplementary Data.
This section of the Annual Report on Form 10-K generally discusses the years ended December 31, 2024 and 2023 and the year-over-year comparisons between the years ended December 31, 2024 and 2023.
This section of this Annual Report on Form 10-K generally discusses the years ended December 31, 2025 and 2024 and the year-over-year comparisons between the years ended December 31, 2025 and 2024.
We define Adjusted EBITDA as operating income plus depreciation and amortization, stock-based compensation, severance and acquisition related retention costs, costs related to the execution and integration of acquisitions, inventory net realizable value adjustments, amortization of fair value step-up resulting from acquisitions and other non-recurring items. Management uses operating income and Adjusted EBITDA to evaluate the performance of its reportable segments.
We define Adjusted EBITDA as operating income plus depreciation and amortization, stock-based compensation, severance and acquisition related retention costs, costs related to the execution and integration of acquisitions, amortization of fair value step-up resulting from acquisitions and other non-recurring items. Management uses operating income and Adjusted EBITDA to evaluate the performance of its reportable segments.
As of December 31, 2024, we were in compliance with all financial covenants under our Amended Credit Agreement.
As of December 31, 2025, we were in compliance with all financial covenants under our Amended Credit Agreement .
The average monthly PMI wa s 48.3 in the year ended December 31, 2024, compared to 47.1 in the year ended December 31, 2023, and 53.5 in the year ended December 31, 2022 . Lawson Sales Drivers The North American MRO market is highly fragmented.
The average monthly PMI wa s 48.9 in the year ended December 31, 2025, compared to 48.3 in the year ended December 31, 2024, and 47.1 in the year ended December 31, 2023 . Lawson Sales Drivers The North American MRO market is highly fragmented.
The Company considers factors such as macroeconomic, industry and market conditions, cost factors, overall financial performance and other relevant factors that would affect the individual reporting units.
The Company considers factors such as macroeconomic, industry and market conditions, cost factors, overall 38 Table of Contents financial performance and other relevant factors that would affect the individual reporting units.
Cash Provided by (Used in) Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $229.7 million, primarily due to the purchase of ESS, S&S Automotive, Source Atlantic , TCR and certain assets of ConRes TE as well as purchases of property, plant and equipment and rental equipment.
Net cash used in investing activities for the year ended December 31, 2024 was $229.7 million, primarily due to the purchase of ESS, S&S Automotive, Source Atlantic , TCR and ConRes TE as well as purchases of property, plant and equipment and rental equipment. This was partially offset by the sale of property, plant and equipment and rental equipment.
Change in Fair Value of Earnout Liabilities The $1.0 million expense in 2024 and the $0.8 million benefit in 2023 related to the change in fair value of the earnout liabilities associated with the Frontier acquisition.
Change in Fair Value of Earnout Liabilities The $1.0 million expense in 2025 and the $1.0 million expense in 2024 related to the change in fair value of the earnout liabilities associated with the Frontier acquisition.
Lawson also is expanding its inside sales team to help drive field sales representative productivity and also utilizes an e-commerce site to generate sales. TestEquity Sales Drivers Across the test and measurement, industrial and electronic production supplies businesses, the North American market is highly fragmented with competitors ranging from large global distributors to national and regional distributors.
Lawson also utilizes an inside sales team to help drive field sales representative productivity and also utilizes an e-commerce site to generate sales. TestEquity Sales Drivers The North American market for test and measurement, industrial, and electronic production supplies is highly fragmented, with competition ranging from global to regional distributors.
Income Tax Expense (Benefit) Income tax expense was $6.8 million, a (1,267.9)% effective tax rate for the year ended December 31, 2024 compared to income tax expense of $7.0 million and a (346.8)% effective tax rate for the prior year.
Income Tax Expense (Benefit) Income tax expense was $11.1 million, a 57.0% effective tax rate for the year ended December 31, 2025 compared to income tax expense of $6.8 million and a (1,267.9)% effective tax rate for the prior year.
Approximately $18.1 million of the increased expenses, including depreciation, was driven by the acquisition of Source Atlantic completed in 2024.
Approximately $29.6 million of the increased expenses, including depreciation, was driven by the acquisition of Source Atlantic completed in 2024.
G ross profit as a percent of revenue decreased to 33.7% in 2024 compared to 42.0% in the prior year primarily due to the lower gross profit margin profile of Source Atlantic as compared to Bolt .
G ross profit as a percentage of revenue decreased to 33.2% in 2025 compared to 33.7% in the prior year primarily due to the lower gross profit margin profile of Source Atlantic as compared to Bolt .
Source Atlantic was acquired to expand DSG’s operating footprint in the Canadian market. Canada Branch Division’s strategy is to grow revenue through increasing wallet share with existing customers, via introduction of new product lines and services in geographic areas that were underserviced previously. Additionally, Canada Branch Division will engage new customers and additional ship-to locations with its national sales team.
Source Atlantic was acquired in 2024 to expand DSG’s operating footprint in the Canadian market. Canada Branch Division’s strategy is to grow revenue through increasing wallet share with existing customers, via introduction of new product lines and services in geographic areas that were underserviced previously.
Selling, General and Administrative Expenses Selling, general and administrative expenses for Canada Branch Division consist of compensation, expenses to operate its distribution network and branch locations and overhead expenses. Selling, general and administrative expenses increased $18.4 million to $36.2 million in 2024 compared to $17.8 million in 2023.
Selling, General and Administrative Expenses Selling, general and administrative expenses for Canada Branch Division consist of compensation, expenses to operate its distribution network and branch locations and overhead expenses. Selling, general and administrative expenses increased $29.6 million to $65.8 million in 2025 compared to $36.2 million in 2024.
Gexpro Services’ revenue is influenced by our OEMs’ production schedules, new product introduction launches, and service project needs. Gexpro Services’ strategy is to increase revenue through increasing wallet share with existing customers, customer-led geographic expansion, new customer development in its six key vertical markets and leveraging its portfolio of recent acquisitions to expand its installation and aftermarket services.
Gexpro Services’ strategy is to increase revenue through increasing wallet share with existing customers, customer-led geographic expansion, new customer development in its six key vertical markets and leveraging its portfolio of recent acquisitions to expand its installation and aftermarket services.
Adjusted EBITDA During 2024 , Canada Branch Division generated Adjusted EBITDA of $11.7 million, an increase of $3.8 million from the same period a year ago with an increase of approximately $4.1 million driven by the acquisition of Source Atlantic completed in 2024.
Adjusted EBITDA During 2025 , Canada Branch Division generated Adjusted EBITDA of $15.6 million, an increase of $4.0 million, or 34.2% from the same period a year ago with an increase of approximately $3.4 million driven by the acquisition of Source Atlantic completed in 2024.
During 2023, the Company repurchased 138,725 shares of DSG common stock at an average cost of $26.09 per share for a total cost of $3.6 million . T he remaining availability for stock repurchases under the program was $26.4 million at December 31, 2024. See Note 11 – Stockholders’ Equity within Item 8.
During 2024, the Company repurchased 85,644 shares of DSG common stock at an average cost of $30.13 per share for a total cost of $2.6 million . T he remaining availability for stock repurchases under the program was $32.9 million at December 31, 2025. See Note 11 – Stockholders’ Equity within Item 8.
Cash Provided by (Used in) Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $159.3 million primarily due to borrowings under the Company’s credit facility partially offset by principal payments on the term loans.
Net cash provided by financing activities for the year ended December 31, 2024 was $159.3 million primarily due to borrowings under the Company’s credit facility partially offset by principal payments on the term loans. In conjunction with the Source Atlantic Transaction, the Company borrowed $200 million under the incremental term loan facility on August 14, 2024.
Goodwill Impairment - Goodwill represents the cost of business acquisitions in excess of the fair value of identifiable net tangible and intangible assets acquired. The Company reviews goodwill for potential impairment annually on October 1st, or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value.
The Company reviews goodwill for potential impairment annually on October 1st, or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value.
Other Income (Expense), Net Other income (expense), net consists of effects of changes in foreign currency exchange rates, interest income, net and other non-operating income and expenditures. The $2.6 million change in 2024 compared to 2023 was partly due to favorable increases in interest income and favorable changes in foreign currency exchange rates.
Other Income (Expense), Net Other income (expense), net consists of effects of changes in foreign currency exchange rates, interest income, net and other non-operating income and expenditures. The $2.1 million change in 2025 compared to 2024 was primarily due to unfavorable changes in foreign currency exchange rates and an unfavorable decrease in interest income.
In addition to these four reportable segments, we have 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.
In addition to these four reportable segments, we have 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. Recent Events 2025 Debt Amendment In December 2025, the Company amended and expanded the senior secured facility through 2030.
This was partially offset by the sale of property, plant and equipment and rental equipment. Net cash used in investing activities for the year ended December 31, 2023 was $278.5 million, primarily due to the Hisco Transaction, as well as purchases of property, plant and equipment and rental equipment which was partially offset by the sale of rental equipment.
Cash Provided by (Used in) Investing Activities Net cash used in investing activities for the year ended December 31, 2025 was $29.5 million, primarily due to the purchase of property, plant and equipment and rental equipment, partially offset by the sale of property, plant and equipment and rental equipment.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and support for TestEquity’s sales representatives and expenses to operate TestEquity’s distribution network and overhead expenses. Selling, general and administrative expenses increased $13.5 million to $171.8 million in 2024 compared to $158.3 million in 2023 .
Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and support for TestEquity’s sales representatives and expenses to operate TestEquity’s distribution network and overhead expenses. Selling, general and administrative expenses decreased $16.7 million to $155.1 million in 2025 compared to $171.8 million in 2024 .
Gross profit increased $18.7 million to $42.2 million in 2024 compared to gross profit of $23.5 million in 2023 primarily as a result of the inclusion of the acquisition of Source Atlantic completed in 2024, which generated $18.7 million of additional gross profit during 2024.
Gross profit increased $31.3 million to $73.5 million in 2025 compared to gross profit of $42.2 million in 2024 primarily as a result of the inclusion of $30.7 million of additional gross profit from the acquisition of Source Atlantic completed in 2024.
Financial Statements and Supplementary Data for a description of the Amended Credit Agreement. On December 31, 2024, we had $739.9 million in outstanding borrowings under the Amended Credit Agreement and $253.0 million of bo rrowing availability remaining, net of outstanding letters of credit, under the senior secured revolving credit facility component.
Financial Statements and Supplementary Data for additional information about the Amended Credit Agreement. 37 On December 31, 2025, we had $704.4 million in outstanding borrowings under the Amended Credit Agreement and $393.7 million of bo rrowing availability remaining, net of outstanding letters of credit, under the senior secured revolving credit facility component.
Revenue and Gross Profit Revenue increased $35.0 million, or 8.6%, to $440.7 million in 2024 compared to $405.7 million in 2023. There were two more selling days in the year ended December 31, 2024, compared to the same period a year ago . A selling day generally represents a business day in which Gexpro Services ships products to its customers.
Revenue and Gross Profit Revenue increased $55.9 million, or 12.7%, to $496.7 million in 2025 compared to $440.7 million in 2024. There was one less selling day in the year ended December 31, 2025, compared to the same period a year ago . A selling day generally represents a business day in which Gexpro Services ships products to its customers.
In December 2023, the Board of Directors increased the existing repurchase program by $25.0 million bringing the total authorized to $37.5 million. During 2024, the Company repurchased 85,644 shares of DSG common stock at an average cost of $30.13 per share for a total cost of $2.6 million.
In November 2025, the Board of Directors increased the existing stock repurchase program by $30.0 million bringing the total authorized stock repurchase program to $67.5 million. During 2025, the Company repurchased 776,924 shares of DSG common stock at an average cost of $30.26 per share for a total cost of $23.5 million.
Segment revenue and Operating income (loss) by reportable segment includes sales to external customers and sales transactions between our segments, referred to as intersegment revenue, and the impact of those intersegment revenue transactions on operating activities.
(5) Other non-recurring costs consist of certain non-recurring strategic projects and other non-recurring items. 30 Composition of Results of Operations Segment revenue and Operating income (loss) by reportable segment includes sales to external customers and sales transactions between our segments, referred to as intersegment revenue, and the impact of those intersegment revenue transactions on operating activities.
The Third Amendment provided for an additional $200 million incremental term loan and a $55 million increase in the senior secured revolving credit facility to $255 million, and permits the Company to increase the commitments under the agreement from time to time by up to $300 million in the aggregate, subject to, among other things, receipt of additional commitments from existing and/or new lenders and pro forma compliance with certain financial covenants.
The new facility includes $700 million of term debt and a revolving credit arrangement of $400 million, an increase over the previous revolver capacity of $255 million and permits the Company to increase the commitments under the credit facility from time to time by up to $500 million in the aggregate, subject to, among other things, receipt of additional commitments from existing and/or new lenders and pro forma compliance with certain financial covenants.
The Company believes its current balances of cash and cash equivalents, availability under its Amended Credit Agreement and cash flows from operations will be sufficient to meet its liquidity needs for the next twelve months. On August 14, 2024, the Company borrowed $200 million under the incremental term loan of the Amended Credit Agreement.
LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents were $61.8 million on December 31, 2025, compared to $66.5 million on December 31, 2024. The Company believes its current balances of cash and cash equivalents, availability under its Amended Credit Agreement and cash flows from operations will be sufficient to meet its liquidity needs for the next twelve months.
Consolidated Gross profit and Selling, general and administrative expenses also increased over the prior year primarily driven by the inclusion of the Hisco, ESS, S&S, Source Atlantic, TCR and ConRes TE acquisitions completed in 2023 and 2024.
Consolidated Gross profit and Selling, general and administrative expenses also increased over the prior year primarily driven by the 2024 acquisitions of ESS, S&S Automotive, Source Atlantic, TCR and ConRes TE (each as defined in Note 3 – Business and Asset Acquisitions in Item 8. Financial Statements and Supplementary Data).
Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and support for Lawson sales representatives as well as expenses to operate Lawson’s distribution network and overhead expenses.
Lawson gross profit as a percentage of revenue was 54.9% in 2025 compared to gross profit as a percentage of revenue of 54.8% in the prior year. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and support for Lawson sales representatives as well as expenses to operate Lawson’s distribution network and overhead expenses.
Financial Statements and Supplementary Data. 35 RESULTS OF OPERATIONS FOR 2024 AS COMPARED TO 2023 Consolidated Results of Operations Year Ended December 31, 2024 2023 (Dollars in thousands) Amount % of Revenue Amount % of Revenue Revenue Lawson $ 469,044 26.0 % $ 468,711 29.8 % TestEquity 771,180 42.7 % 641,768 40.9 % Gexpro Services 440,723 24.4 % 405,733 25.8 % Canada Branch Division 125,099 6.9 % 55,890 3.6 % Intersegment revenue elimination (1,942) (0.1) % (1,700) (0.1) % Total Revenue 1,804,104 100.0 % 1,570,402 100.0 % Cost of goods sold Lawson 211,784 11.7 % 203,251 12.9 % TestEquity 595,368 33.0 % 499,916 31.8 % Gexpro Services 302,228 16.8 % 284,664 18.1 % Canada Branch Division 82,897 4.6 % 32,396 2.1 % Intersegment cost of goods sold elimination (1,948) (0.1) % (1,700) (0.1) % Total Cost of goods sold 1,190,329 66.0 % 1,018,527 64.9 % Gross profit 613,775 34.0 % 551,875 35.1 % Selling, general and administrative expenses Lawson 242,705 13.5 % 232,962 14.8 % TestEquity 171,845 9.5 % 158,317 10.1 % Gexpro Services 101,962 5.7 % 94,069 6.0 % Canada Branch Division 36,178 2.0 % 17,763 1.1 % All Other 5,130 0.3 % 5,773 0.4 % Total Selling, general and administrative expenses 557,820 30.9 % 508,884 32.4 % Operating income (loss) 55,955 3.1 % 42,991 2.7 % Interest expense (55,145) (3.1) % (42,774) (2.7) % Change in fair value of earnout liabilities (988) (0.1) % 758 — % Other income (expense), net (358) — % (2,982) (0.2) % Income (loss) before income taxes (536) — % (2,007) (0.1) % Income tax expense (benefit) 6,796 0.4 % 6,960 0.4 % Net income (loss) $ (7,332) (0.4) % $ (8,967) (0.6) % Overview of Consolidated Results of Operations Our consolidated revenue increased $233.7 million for 2024 compared to 2023 primarily driven by $268.2 million of revenue from acquisitions completed in 2023 and 2024 offset by a decline in organic revenue of $34.5 million.
RESULTS OF OPERATIONS FOR 2025 AS COMPARED TO 2024 Consolidated Results of Operations Year Ended December 31, 2025 2024 (Dollars in thousands) Amount % of Revenue Amount % of Revenue Revenue Lawson $ 481,088 24.3 % $ 469,044 26.0 % TestEquity 783,237 39.6 % 771,180 42.7 % Gexpro Services 496,655 25.1 % 440,723 24.4 % Canada Branch Division 221,426 11.2 % 125,099 6.9 % Intersegment revenue elimination (2,383) (0.1) % (1,942) (0.1) % Total Revenue 1,980,023 100.0 % 1,804,104 100.0 % Cost of goods sold Lawson 217,058 11.0 % 211,784 11.7 % TestEquity 613,707 31.0 % 595,368 33.0 % Gexpro Services 341,685 17.3 % 302,228 16.8 % Canada Branch Division 147,910 7.5 % 82,897 4.6 % Intersegment cost of goods sold elimination (2,375) (0.1) % (1,948) (0.1) % Total Cost of goods sold 1,317,985 66.6 % 1,190,329 66.0 % Gross profit 662,038 33.4 % 613,775 34.0 % Selling, general and administrative expenses Lawson 245,267 12.4 % 242,705 13.5 % TestEquity 155,125 7.8 % 171,845 9.5 % Gexpro Services 106,159 5.4 % 101,962 5.7 % Canada Branch Division 65,802 3.3 % 36,178 2.0 % All Other 11,422 0.6 % 5,130 0.3 % Total Selling, general and administrative expenses 583,775 29.5 % 557,820 30.9 % Operating income (loss) 78,263 4.0 % 55,955 3.1 % Interest expense (55,352) (2.8) % (55,145) (3.1) % Change in fair value of earnout liabilities (1,000) (0.1) % (988) (0.1) % Other income (expense), net (2,500) (0.1) % (358) — % Income (loss) before income taxes 19,411 1.0 % (536) — % Income tax expense (benefit) 11,066 0.6 % 6,796 0.4 % Net income (loss) $ 8,345 0.4 % $ (7,332) (0.4) % 31 Overview of Consolidated Results of Operations Our consolidated revenue increased $175.9 million for 2025 compared to 2024 primarily driven by $121.5 million of revenue from acquisitions completed in 2024 and an increase in organic revenue of $54.4 million.
Adjusted EBITDA During 2024 , Gexpro Services generated Adjusted EBITDA of $55.8 million , an increase of $10.6 million, or 23.4% from 2023 primarily driven by higher organic revenue and managing gross profit margins, partially offset by an increase in Selling, general, and administrative expenses. 39 Canada Branch Division Segment Year Ended December 31, Change (Dollars in thousands) 2024 2023 Amount % Revenue from external customers $ 125,099 $ 55,890 $ 69,209 123.8 % Intersegment revenue — — — — % Revenue 125,099 55,890 69,209 123.8 % Cost of goods sold 82,897 32,396 50,501 155.9 % Gross profit 42,202 23,494 18,708 79.6 % Selling, general and administrative expenses 36,178 17,763 18,415 103.7 % Operating income (loss) $ 6,024 $ 5,731 $ 293 5.1 % Gross profit margin 33.7 % 42.0 % Adjusted EBITDA (1) $ 11,651 $ 7,802 $ 3,849 49.3 % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income to Adjusted EBITDA.
Adjusted EBITDA During 2025 , Gexpro Services generated Adjusted EBITDA of $63.7 million , an increase of $8.0 million, or 14.3% from 2024 primarily driven by higher organic revenue, managing gross profit margins and leveraging Selling, general, and administrative expenses over a higher sales base. 34 Canada Branch Division Segment Year Ended December 31, Change (Dollars in thousands) 2025 2024 Amount % Revenue from external customers $ 221,393 $ 125,099 $ 96,294 77.0 % Intersegment revenue 33 — 33 — % Revenue 221,426 125,099 96,327 77.0 % Cost of goods sold 147,910 82,897 65,013 78.4 % Gross profit 73,516 42,202 31,314 74.2 % Selling, general and administrative expenses 65,802 36,178 29,624 81.9 % Operating income (loss) $ 7,714 $ 6,024 $ 1,690 28.1 % Gross profit margin 33.2 % 33.7 % Adjusted EBITDA (1) $ 15,630 $ 11,651 $ 3,979 34.2 % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income to Adjusted EBITDA.
Refer to Results by Reportable Segment below for a complete discussion of our results of operations. 36 Results by Reportable Segment Lawson Segment Year Ended December 31, Change (Dollars in thousands) 2024 2023 Amount % Revenue from external customers $ 468,976 $ 468,379 $ 597 0.1 % Intersegment revenue 68 332 (264) (79.5) % Revenue 469,044 468,711 333 0.1 % Cost of goods sold 211,784 203,251 8,533 4.2 % Gross profit 257,260 265,460 (8,200) (3.1) % Selling, general and administrative expenses 242,705 232,962 9,743 4.2 % Operating income (loss) $ 14,555 $ 32,498 $ (17,943) (55.2) % Gross profit margin 54.8 % 56.6 % Adjusted EBITDA (1) $ 56,399 $ 63,663 $ (7,264) (11.4) % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income to Adjusted EBITDA.
Results by Reportable Segment Lawson Segment Year Ended December 31, Change (Dollars in thousands) 2025 2024 Amount % Revenue from external customers $ 480,768 $ 468,976 $ 11,792 2.5 % Intersegment revenue 320 68 252 370.6 % Revenue 481,088 469,044 12,044 2.6 % Cost of goods sold 217,058 211,784 5,274 2.5 % Gross profit 264,030 257,260 6,770 2.6 % Selling, general and administrative expenses 245,267 242,705 2,562 1.1 % Operating income (loss) $ 18,763 $ 14,555 $ 4,208 28.9 % Gross profit margin 54.9 % 54.8 % Adjusted EBITDA (1) $ 51,642 $ 56,399 $ (4,757) (8.4) % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income to Adjusted EBITDA.
The following table provides a reconciliation of Net income to Adjusted EBITDA on a consolidated basis and Operating income to Adjusted EBITDA by segment for the years ended December 31, 2024, 2023 and 2022 .
See Note 14 – Segment Information within Item 8. Financial Statements and Supplementary Data for additional information about our reportable segments. The following table provides a reconciliation of Net income (loss) to Adjusted EBITDA on a consolidated basis and Operating income (loss) to Adjusted EBITDA by segment for the years ended December 31, 2025 and 2024 .
The following discussion and analysis of DSG’s financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and related notes included in this Annual Report on Form 10-K, the audited consolidated financial statements and accompanying notes included in DSG’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 7, 2024, the audited consolidated financial statements and accompanying notes included in DSG’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 14, 2023 and the Lawson Products, Inc. unaudited condensed consolidated financial statements and accompanying notes included in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, filed on April 28, 2022.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of DSG’s financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and related notes included in this Annual Report on Form 10-K.
Revenue and Gross Profit Revenue increased $129.4 million , or 20.2%, to $771.2 million in 2024 compared to $641.8 million in 2023 .
Revenue and Gross Profit Revenue increased $12.1 million , or 1.6%, to $783.2 million in 2025 compared to $771.2 million in 2024 .
(2) Includes severance expense from actions taken not related to a formal restructuring plan and acquisition related retention expenses. (3) Transaction and integration costs related to acquisitions. (4) Inventory net realizable value adjustment recorded to reduce inventory related to discontinued products where the anticipated net realizable value was lower than the cost reflected in our records.
(2) Includes severance expense from actions taken not related to a formal restructuring plan and acquisition related retention expenses. (3) Transaction and integration costs related to acquisitions. (4) Inventory fair value step-up adjustment for acquisition accounting related to acquisitions completed.
Net cash provided by operations for the year ended December 31, 2023 was $102.3 million, primarily due to non-cash items, partially offset by a net loss and improvements in working capital.
Net cash provided by operations for the year ended December 31, 2024 was $56.5 million, primarily due to non-cash items, partially offset by a net loss, payments of $34.6 million related to the Hisco retention bonuses and other net cash flow items.
Revenue and Gross Profit Revenue increased $69.2 million , or 123.8% , to $125.1 million in 2024 compared to $55.9 million in 2023 . The increase was primarily driven by $70.3 million of revenue generated from the acquisition of Source Atlantic completed in 2024, partially offset by a decline in organic Canada Branch Division revenue of $1.1 million.
Revenue and Gross Profit Revenue increased $96.3 million , or 77.0% , to $221.4 million in 2025 compared to $125.1 million in 2024 . The increase was primarily driven by $93.4 million of additional revenue generated from the acquisition of Source Atlantic completed in 2024 .
Access to debt capital markets has historically provided the Company with sources of liquidity, beyond normal operating cash flows.
Refer to Note 9 – Debt within Item 8. Financial Statements and Supplementary Data for additional information related to our debt obligations. Access to debt capital markets has historically provided the Company with sources of liquidity, beyond normal operating cash flows.
Approximately $10.3 million of the increased expenses was driven by the acquisitions completed in 2024 in addition to higher severance and merger and acquisition expenses of $4.5 million and $4.0 million , respectively. These costs were partially offset by a decrease in stock-based compensation expense of $3.8 million and a decrease in variable compensation as a result of lower sales.
The increase was driven primarily by additional selling, general and administrative expenses of approximately $3.8 million due to the acquisitions completed in 2024, higher employee related costs of $5.8 million and higher depreciation and amortization expense of $2.7 million partially offset by a decrease in severance expense, merger and acquisition expenses and stock based compensation of $2.3 million, $6.9 million and $1.2 million, respectively .
Adjusted EBITDA During 2024 , TestEquity generated Adjusted EBITDA of $56.3 million , an increase of $13.0 million from the same period a year ago with an increase of approximately $16.2 million driven by the acquisitions completed in 2024 and 2023, partially offset by a reduction of $3.2 million in legacy TestEquity primarily due to a decline in organic revenue. 38 Gexpro Services Segment Year Ended December 31, Change (Dollars in thousands) 2024 2023 Amount % Revenue from external customers $ 439,163 $ 404,490 $ 34,673 8.6 % Intersegment revenue 1,560 1,243 317 25.5 % Revenue 440,723 405,733 34,990 8.6 % Cost of goods sold 302,228 284,664 17,564 6.2 % Gross profit 138,495 121,069 17,426 14.4 % Selling, general and administrative expenses 101,962 94,069 7,893 8.4 % Operating income (loss) $ 36,533 $ 27,000 $ 9,533 35.3 % Gross profit margin 31.4 % 29.8 % Adjusted EBITDA (1) $ 55,775 $ 45,191 $ 10,584 23.4 % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income to Adjusted EBITDA.
Adjusted EBITDA During 2025 , TestEquity generated Adjusted EBITDA of $51.0 million , a decrease of $5.3 million, or 9.5%, from the same period a year ago primarily driven by lower gross margins and higher employee compensation expenses partially offset by additional net margins of $7.7 million generated from the 2024 acquisition of ConRes TE. 33 Gexpro Services Segment Year Ended December 31, Change (Dollars in thousands) 2025 2024 Amount % Revenue from external customers $ 495,495 $ 439,163 $ 56,332 12.8 % Intersegment revenue 1,160 1,560 (400) (25.6) % Revenue 496,655 440,723 55,932 12.7 % Cost of goods sold 341,685 302,228 39,457 13.1 % Gross profit 154,970 138,495 16,475 11.9 % Selling, general and administrative expenses 106,159 101,962 4,197 4.1 % Operating income (loss) $ 48,811 $ 36,533 $ 12,278 33.6 % Gross profit margin 31.2 % 31.4 % Adjusted EBITDA (1) $ 63,734 $ 55,775 $ 7,959 14.3 % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income to Adjusted EBITDA.
Purchase Commitments As of December 31, 2024, we had contractual commitments to purchase approximately $173 million of products from our suppliers and contractors over the next twelve months. Capital Expenditures During the year ended December 31, 2024, t otal capital expenditures for property, plant and equipment and rental equipment were $23.2 million excluding proceeds from the sale of rental equipment.
Purchase Commitments As of December 31, 2025, we had contractual commitments to purchase approximately $240 million of products from our suppliers and contractors over the next twelve months.
Gross profit increased $34.0 million to $175.8 million in 2024 compared to $141.9 million in 2023 primarily as a result of the inclusion of the acquisitions completed in 2024 and 2023, which generated $39.5 million of additional gross profit during 2024, partially offset by a decrease in gross profit on the decline in legacy TestEquity revenue.
Gross profit increased $6.8 million , or 2.6%, to $264.0 million in 2025 compared to gross profit of $257.3 million in 2024 primarily as a result of the inclusion of $9.2 million of additional gross profit from the acquisitions completed in 2024 partially offset by lower revenue for legacy Lawson.
Such amounts are adjusted, as appropriate, to reflect changes in enacted tax rates expected to be in effect when the temporary differences reverse. Significant judgment is required in determining income tax provisions as well as deferred tax asset and liability balances, including the estimation of valuation allowances and the evaluation of uncertain tax positions.
Income Taxes - Deferred tax assets or liabilities reflect temporary differences between amounts of assets and liabilities for financial and tax reporting. Such amounts are adjusted, as appropriate, to reflect changes in enacted tax rates expected to be in effect when the temporary differences reverse.
As of December 31, 2024, the Company had $66.5 million of cash and cash equivalents and $253.0 million of bo rrowing availability remaining, net of outstanding letters of credit, under the Amended Credit Agreement. 51 Our primary short-term and long-term liquidity and capital resource needs are to finance operating expenses, working capital, capital expenditures, potential business acquisitions, strategic initiatives and general corporate purposes.
Our primary short-term and long-term liquidity and capital resource needs are to finance operating expenses, working capital, capital expenditures, potential business acquisitions, strategic initiatives and general corporate purposes. Our current debt obligations under the Amended Credit Agreement mature in December 2030. Required principal payments on the Amended Credit Agreement for the next twelve months are $35.0 million .
The Company expects to spend appro ximately $20 million to $25 million for capital expenditures during 2025 to support ongoing operations. Stock Repurchase Program The Company’s Board of Directors previously authorized a stock repurchase program that permits the Company to repurchase its common stock.
Stock Repurchase Program The Company’s Board of Directors previously authorized a stock repurchase program that permits the Company to repurchase DSG common stock.
Refer to Note 9 – Debt in Item 8. Financial Statements and Supplementary Data for additional information about DSG’s credit agreement. Sales Drivers DSG believes that the Purchasing Managers Index (“PMI”) published by the Institute for Supply Management is an indicative measure of the relative strength of the economic environment of the industry in which it operates.
T he remaining availability for stock repurchases under the stock repurchase program was $32.9 million at December 31, 2025. Sales Drivers DSG believes that the Purchasing Managers Index (“PMI”) published by the Institute for Supply Management is an indicative measure of the relative strength of the economic environment of the industry in which it operates.
Financial Statements and Supplementary Data. 31 Factors Affecting Comparability to Prior Periods Our results of operations are not directly comparable on a year-over-year basis due to various business combinations. We account for acquisitions under Accounting Standards Codification 805, Business Combinations (“ASC 805”). Accordingly, the results of acquisitions are only included subsequent to their respective acquisition dates.
We account for acquisitions under Accounting Standards Codification 805, Business Combinations (“ASC 805”). Accordingly, the results of acquisitions are only included subsequent to their respective acquisition dates. Refer to Note 3 – Business and Asset Acquisitions within Item 8.
The pro forma adjustments were obtained from the unaudited pro forma condensed combined financial information included in DSG’s Current Report on Form 8-K/A filed on August 24, 2023. Non-GAAP Financial Measures The Company’s management believes that certain non-GAAP financial measures may provide users of this financial information with additional meaningful comparisons between current results and results in prior operating periods.
Financial Statements and Supplementary Data for a description of each acquisition completed in 2024 and the reportable segment that each acquisition’s respective results of operations is included in. Non-GAAP Financial Measures The Company’s management believes that certain non-GAAP financial measures may provide users of this financial information with additional meaningful comparisons between current results and results in prior operating periods.
Consolidated Non-operating Income and Expense Year Ended December 31, Change (Dollars in thousands) 2024 2023 Amount % Interest expense $ (55,145) $ (42,774) $ (12,371) 28.9 % Change in fair value of earnout liabilities $ (988) $ 758 $ (1,746) N/M Other income (expense), net $ (358) $ (2,982) $ 2,624 (88.0) % Income tax expense (benefit) $ 6,796 $ 6,960 $ (164) (2.4) % N/M Not meaningful 40 Interest Expense Interest expense increased $12.4 million in 2024 compared to 2023 primarily due to an increase in interest rates and higher outstanding borrowings related to the acquisitions of Hisco, S&S Automotive, Source Atlantic, TCR and ConRes TE.
Consolidated Non-operating Income and Expense Year Ended December 31, Change (Dollars in thousands) 2025 2024 Amount % Interest expense $ (55,352) $ (55,145) $ (207) 0.4 % Change in fair value of earnout liabilities $ (1,000) $ (988) $ (12) 1.2 % Other income (expense), net $ (2,500) $ (358) $ (2,142) N/M Income tax expense (benefit) $ 11,066 $ 6,796 $ 4,270 62.8 % N/M Not meaningful 35 Interest Expense Interest expense was flat in 2025 compared to 2024 as higher average borrowings in 2025 were partially offset with lower interest rates in 2025.
Hisco also offers vendor-managed inventory and Radio Frequency Identification (“RFID”) programs with specialized warehousing for chemical management, logistics services and cold storage. Gexpro Services Sales Drivers The global supply chain solutions market is highly fragmented across Gexpro Services’ key vertical segments. Gexpro Services’ competitors range from large global distributors and manufacturers to small regional domestic distributors and manufacturers.
Gexpro Services Sales Drivers The global supply chain solutions market is highly fragmented across Gexpro Services’ key vertical segments. Gexpro Services’ competitors range from large global distributors and manufacturers to small regional domestic distributors and manufacturers. Gexpro Services’ revenue is influenced by our OEMs’ production schedules, new product introduction launches, and service project needs.
Adjusted EBITDA During 2024 , Lawson generated Adjusted EBITDA of $56.4 million , a decrease of 11.4% or $7.3 million from the prior year p rimarily driven by lower organic revenue and gross profit margin partially offset by contributions of approximately $6.2 million generated by the acquisitions completed in 2024. 37 TestEquity Segment Year Ended December 31, Change (Dollars in thousands) 2024 2023 Amount % Revenue from external customers $ 770,866 $ 641,643 $ 129,223 20.1 % Intersegment revenue 314 125 189 151.2 % Revenue 771,180 641,768 129,412 20.2 % Cost of goods sold 595,368 499,916 95,452 19.1 % Gross profit 175,812 141,852 33,960 23.9 % Selling, general and administrative expenses 171,845 158,317 13,528 8.5 % Operating income (loss) $ 3,967 $ (16,465) $ 20,432 (124.1) % Gross profit margin 22.8 % 22.1 % Adjusted EBITDA (1) $ 56,288 $ 43,283 $ 13,005 30.0 % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income (loss) to Adjusted EBITDA.
TestEquity Segment Year Ended December 31, Change (Dollars in thousands) 2025 2024 Amount % Revenue from external customers $ 782,367 $ 770,866 $ 11,501 1.5 % Intersegment revenue 870 314 556 177.1 % Revenue 783,237 771,180 12,057 1.6 % Cost of goods sold 613,707 595,368 18,339 3.1 % Gross profit 169,530 175,812 (6,282) (3.6) % Selling, general and administrative expenses 155,125 171,845 (16,720) (9.7) % Operating income (loss) $ 14,405 $ 3,967 $ 10,438 263.1 % Gross profit margin 21.6 % 22.8 % Adjusted EBITDA (1) $ 50,951 $ 56,288 $ (5,337) (9.5) % (1) Refer to the Non-GAAP Adjusted EBITDA section in Overview for a reconciliation of operating income (loss) to Adjusted EBITDA.
The increase in revenue was primarily driven by increased sales in the renewable energy vertical market of $21.8 million, increased sales in the aerospace and defense vertical market of $6.4 million, strengthening sales within the technology vertical market of $6.7 million and $0.6 million of revenue generated from the acquisition completed in 2024, partially offset by softness within the consumer and industrial vertical market.
Average daily sales increased 13.1% over the same period a year ago. The increase in revenue was primarily driven by increased sales in the renewable energy, aerospace and defense and technology vertical markets of $25.3 million, $15.8 million, and $8.0 million, respectively, and additional revenue generated from the 2024 acquisition of TCR of $3.9 million.
In conjunction with the Source Atlantic Transaction, the Company borrowed $200 million under the incremental term loan facility on August 14, 2024. During 2024, deferred financing costs of $2.1 million were incurred related to the Amended Credit Agreement.
During 2024, deferred financing costs of $2.1 million were incurred related to the Original Credit Agreement. Financing and Capital Requirements Credit Facility In December 2025, the Company amended and expanded the senior secured facility through 2030.
Selling, general, and administrative expenses increased $2.5 million to $94.1 million in 2023 compared to $91.6 million in the same period of 2022.
Selling, general and administrative expenses increased $2.6 million to $245.3 million in 2025 compared to $242.7 million in 2024.
Net cash provided by financing activities for the year ended December 31, 2023 was $250.4 million, due to borrowings under the Company’s credit facility and proceeds from a rights offering that we completed during the second quarter of 2023, partially offset by repayment of previous indebtedness and principal payments on the term loans.
Cash Provided by (Used in) Financing Activities Net cash used in financing activities for the year ended December 31, 2025 was $64.3 million primarily due to the repayment of previous indebtedness in conjunction with the December 2025 debt refinancing of the Original Credit Agreement with the Amended Credit Agreement, principal payments on the previous term loans and repurchases of DSG common stock under the repurchase program.
Supply Chain Disruptions We continue to be affected by rising supplier costs caused by inflation and increased transportation and labor costs . We have instituted various price increases during 2023 and 2024 in response to rising supplier costs, as well as increased transportation and labor costs in order to manage our gross profit margins.
We have instituted various price increases during 2023, 2024 and 2025 in response to rising supplier costs, increased tariffs, transportation and labor costs in order to attempt to manage our gross profit margins. Factors Affecting Comparability to Prior Periods Our results of operations are not directly comparable on a year-over-year basis due to various business combinations.
Our current debt obligations under the Amended Credit Agreement mature in April 2027. Required principal payments on the Amended Credit Agreement for the next twelve months are $40.3 million . Refer to Note 9 – Debt within Item 8. Financial Statements and Supplementary Data for additional information related to our debt obligations.
The Company used the proceeds from the initial term loan to repay the existing $709 million outstanding under the Original Credit Agreement (as defined in Note 9 – Debt within Item 8. Financial Statements and Supplementary Data). Refer to Note 9 – Debt within Item 8. Financial Statements and Supplementary Data for additional information about the Amended Credit Agreement.
Selling, general and administrative expenses increased $20.2 million to $233.0 million in 2023 compared to pro forma Selling, general and administrative expenses of $212.7 million in the same period of 2022.
Selling, general, and administrative expenses increased $4.2 million to $106.2 million in 2025 compared to $102.0 million in 2024.
The increase was primarily driven by additional depreciation and amortization of $9.2 million as a result of the fair value step-up adjustments related to the reverse merger acquisition accounting and higher stock-based compensation of $12.2 million due to expense of $7.9 million 45 in 2023 and a benefit of $4.2 million realized in 2022, partially offset by lower acquisition related costs of $4.7 million in 2023 compared to the same period of 2022.
The decrease was primarily driven by a decrease in severance and acquisition related retention expense of $16.2 million and merger and acquisition expenses of $2.4 million primarily related to the 2023 acquisition of Hisco, partially offset by an increase in stock based compensation of $1.4 million.
Gexpro Services gross profit as a percent of revenue was 29.8% in 2023 compared to 29.3% in the prior year period. The gross profit margin percentage improvement for 2023 was primarily the result of price increases and lower net freight costs partially offset by higher expense for write-offs of obsolete and excess inventory.
Gexpro Services’ gross profit as a percentage of revenue was 31.2% in 2025 compared to 31.4% in the prior year period. The gross profit margin percentage decrease for 2025 was primarily the result of a sales mix shift and tariff costs not recovered through price increases to customers.
As amended, the Amended Credit Agreement includes a $255 million senior secured revolving credit facility, a $250 million senior secured initial term loan facility, $505 million of incremental term loans, and a $50 million senior secured delayed draw term loan facility. Refer to Note 9 – Debt within Item 8.
The new facility includes $700 million of term debt and a revolving credit arrangement of $400 million, an increase over the previous revolver capacity of $255 million. Refer to Note 9 – Debt within Item 8. Financial Statements and Supplementary Data for additional information about the Amended Credit Agreement.
TestEquity gross profit as a percent of revenue decreased to 22.1% in 2023 compared to 22.8% in the prior year primarily due to the amortization of the fair value step-up of inventory of $3.6 million related to the Hisco Transaction and a shift in sales mix from the lower gross margin rates from the 2022 and 2023 acquisitions.
TestEquity gross profit as a percentage of revenue decreased to 21.6% in 2025 compared to 22.8% in the prior year primarily due to higher depreciation expense on the expanded rental equipment fleet, higher inventory write-offs of $1.2 million and a shift in sales mix toward test and measurement which have lower margins partially offset by favorability in vendor rebates.
For additional details about our segment realignment in the third quarter of 2024, see Note 1 – Nature of Operations and Basis of Presentation in Item 8. Financial Statements and Supplementary Data. References to “DSG”, the “Company”, “we”, “our” or “us” refer to Distribution Solutions Group, Inc. and all entities consolidated in the accompanying consolidated financial statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in DSG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 6, 2025. References to “DSG”, the “Company”, “we”, “our” or “us” refer to Distribution Solutions Group, Inc. and all entities consolidated in the accompanying consolidated financial statements.
Adjusted EBITDA During 2023 , Lawson generated Adjusted EBITDA of $63.7 million , an increase of 64.8% or $25.0 million from the same period a year ago primarily driven by increased revenue and gross profit margin partially offset by an increase in Selling, general and administrative expenses .
Adjusted EBITDA During 2025 , Lawson generated Adjusted EBITDA of $51.6 million , a decrease of 8.4% or $4.8 million from the prior year p rimarily driven by lower organic revenue and higher s elling, general and administrative expenses primarily from higher 32 employee related costs, partially offset by additional contributions of approximately $4.4 million generated by the acquisitions completed in 2024.
The increase was primarily driven by $157.4 million of revenue generated from acquisitions completed in 2024 and 2023, partially offset by a $28.0 million decline in legacy TestEquity revenue due to a slowdown in the electronics assembly market causing softening in the electronic production supplies end markets.
Revenue and Gross Profit Revenue increased $12.0 million , or 2.6% , to $481.1 million in 2025 compared to revenue of $469.0 million in 2024. The increase was primarily driven by $17.0 million of additional revenue generated from the acquisitions completed in 2024, partially offset by a decline in military customer sales of $5.2 million.
Financial Statements and Supplementary Data. The following provides information on the accounts requiring more significant estimates. Income Taxes - Deferred tax assets or liabilities reflect temporary differences between amounts of assets and liabilities for financial and tax reporting.
Financial Statements and Supplementary Data for further information. CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES We have disclosed our significant accounting policies in Note 2 – Summary of Significant Accounting Policies within Item 8. Financial Statements and Supplementary Data. The following provides information on the accounts requiring more significant estimates.
Income Tax Expense (Benefit) Income tax expense was $7.0 million, a (346.8)% effective tax rate for the year ended December 31, 2023 compared to income tax expense of $5.5 million and a 42.8% effective tax rate for the prior year.
The disproportionate effective tax rates were caused by limitations on the deductibility of interest expense and other permanent items on pre-tax income for the year ended December 31, 2025, compared to a small pre-tax loss in the prior year.
Sources and Uses of Cash The following table presents a summary of our cash flows: (in thousands) December 31, 2024 December 31, 2023 Change Net cash provided by (used in) operating activities $ 56,453 $ 102,286 $ (45,833) Net cash provided by (used in) investing activities $ (229,683) $ (278,523) $ 48,840 Net cash provided by (used in) financing activities $ 159,301 $ 250,406 $ (91,105) Cash Provided by (Used in) Operating Activities Net cash provided by operations for the year ended December 31, 2024 was $56.5 million primarily due to non-cash items, partially offset by a net loss, payments of $34.6 million related to the Hisco retention bonuses and other net cash flow items.
We do not currently anticipate having difficulty in obtaining financing from those markets in the future, however, we cannot provide assurance that unforeseen events or events beyond our control (such as a potential tightening of debt capital markets, including in response to the implementation of new tariffs as part of the U.S. trade policy and any reciprocal or retaliatory tariffs thereto) will not have a material adverse impact on our liquidity. 36 Sources and Uses of Cash The following table presents a summary of our cash flows: (in thousands) December 31, 2025 December 31, 2024 Change Net cash provided by (used in) operating activities $ 83,849 $ 56,453 $ 27,396 Net cash provided by (used in) investing activities $ (29,492) $ (229,683) $ 200,191 Net cash provided by (used in) financing activities $ (64,266) $ 159,301 $ (223,567) Cash Provided by (Used in) Operating Activities Net cash provided by operations for the year ended December 31, 2025 was $83.8 million primarily due to net income including non-cash items, partially offset by investments in trade working capital and other net cash flow items.
Removed
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

… 135 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−0 removed1 unchanged
Biggest changeThese risks are highly sensitive to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. 54 Table of Contents The loans under the 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 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 Amended Credit Agreement or (ii) the Adjusted Term SOFR Rate or the CORRA Rate (each as defined in the Amended Credit Agreement), plus, in each case, an additional margin ranging from 1.0% to 2.75% per annum, depending on the total net leverage ratio of the Company and its restricted subsidiaries as of the most recent determination date under the Amended Credit Agreement.
Biggest changeThe loans under the 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 Amended Credit Agreement), plus, in each case, an additional margin ranging from 0.00% 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 Amended Credit Agreement or (ii) the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR (each as defined in the Amended Credit Agreement), plus, in each case, an additional margin ranging from 1.00% 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 Amended Credit Agreement.
We have not entered into, and currently do not intend to enter into, interest rate swaps or other derivative financial instruments to mitigate the impact of fluctuations in interest rates. 55 Table of Contents
We have not entered into, and currently do not intend to enter into, interest rate swaps or other derivative financial instruments to mitigate the impact of fluctuations in interest rates. 39 Table of Contents
Refer to Note 9 – Debt within Item 8. Financial Statements for additional information about the Amended Credit Agreement. As of December 31, 2024, 100% of our debt was floating rate debt. A hypothetical increase/decrease in interest rates of 100 basis points would increase/decrease our annual interest expense by approximately $7.4 million.
Refer to Note 9 – Debt within Item 8. Financial Statements and Supplementary Data for additional information about the Amended Credit Agreement. As of December 31, 2025, 100% of our debt was floating rate debt. A hypothetical increase/decrease in interest rates of 100 basis points would increase/decrease our annual interest expense by approximately $7.0 million.
Added
These risks are highly sensitive to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.

Other DSGR 10-K year-over-year comparisons