Distribution Solutions Group, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Distribution Solutions Group, Inc. (DSGR) has filed its 2023 annual report (10-K) detailing its financial performance and business operations.</b>

AI Summary

Distribution Solutions Group, Inc. (DSGR) filed a Annual Report (10-K) with the SEC on March 7, 2024. Distribution Solutions Group, Inc. (DSGR) filed its 2023 Form 10-K on March 7, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal business is Wholesale - Machinery, Equipment & Supplies (SIC 5080). DSGR was formerly known as Lawson Products Inc. The company is incorporated in Delaware and headquartered in Fort Worth, Texas.

Why It Matters

For investors and stakeholders tracking Distribution Solutions Group, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of DSGR's financial health, operational performance, and strategic direction for the fiscal year 2023, which is crucial for investors to assess the company's current standing and future prospects. As a wholesale distributor of machinery, equipment, and supplies, understanding DSGR's annual performance is key to evaluating its position within its industry and its ability to navigate market dynamics.

Risk Assessment

Risk Level: medium — Distribution Solutions Group, Inc. shows moderate risk based on this filing. The filing is a standard 10-K, which is a comprehensive annual report. While it contains detailed financial information, it does not immediately highlight any significant positive or negative deviations that would suggest an unusually high or low risk profile without further in-depth analysis of the financial statements and risk factors.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 10-K to understand DSGR's performance and potential challenges in the wholesale machinery and equipment sector.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-03-07 — Filing Date (Filed as of date)
• 5080 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• Distribution Solutions Group, Inc. (company) — Filer name
• DSGR (company) — Ticker symbol
• Lawson Products Inc (company) — Former company name
• Fort Worth, Texas (location) — Business address city and state
• Delaware (location) — State of incorporation

FAQ

Industry Context

Distribution Solutions Group operates in the wholesale trade sector, specifically focusing on machinery, equipment, and supplies. This industry involves the distribution of goods to other businesses rather than directly to consumers.

Regulatory Implications

The company is subject to standard SEC regulations for public companies, including the requirement to file annual reports (10-K) detailing financial performance and business operations.

What Investors Should Do

1. Review the full 10-K filing for detailed financial statements and management discussion.
2. Analyze the risk factors section for potential business challenges and uncertainties.
3. Compare DSGR's 2023 performance against previous years and industry benchmarks.

Key Dates

• 2024-03-07: 10-K Filing — Filing of the annual report for the fiscal year ended December 31, 2023.

Year-Over-Year Comparison

This is the initial 10-K filing for Distribution Solutions Group, Inc. for the fiscal year ended December 31, 2023. Previous filings would have been under its former name, Lawson Products Inc.

Key Financial Figures

• $1.00 — nge on which registered Common Stock, $1.00 par value DSGR The NASDAQ Stock Market
• $267.3 m — exchanged for the Hisco Transaction was $267.3 million, net of cash acquired of $12.2 mi
• $12.2 m — $267.3 million, net of cash acquired of $12.2 million, at closing, with a potential add
• $37.5 million — performance targets. DSG will also pay $37.5 million in cash or DSG common stock in retentio
• $22.50 — closing payment in DSG common stock at $22.50 per share, up to an aggregate value of
• $25.0 million — ued to such eligible Hisco employees of $25.0 million. During 2023, the Company issued 144,60
• $3.3 million — co employees and received approximately $3.3 million. Debt Amendment On June 8, 2023, th
• $305 million — ent. The First Amendment provides for a $305 million incremental term loan and for the Compa
• $200 million — commitments from time to time by up to $200 million in the aggregate, subject to, among oth
• $98.5 million — stock for net proceeds of approximately $98.5 million pursuant to a subscription rights offer

Filing Documents

• laws-20231231.htm (10-K) — 2347KB
• a202310-k_ex41.htm (EX-4.1) — 9KB
• a202310kex1009.htm (EX-10.09) — 34KB
• a202310kex1010.htm (EX-10.10) — 33KB
• a202310kex21.htm (EX-21) — 22KB
• a202310kex231.htm (EX-23.1) — 3KB
• a202310kex232.htm (EX-23.2) — 3KB
• a202310kex311.htm (EX-31.1) — 9KB
• a202310kex312.htm (EX-31.2) — 9KB
• a202310kex32.htm (EX-32) — 5KB
• a2023ex97incentivebasedcom.htm (EX-97) — 41KB
• 0000703604-24-000021.txt (&nbsp;) — 13289KB
• laws-20231231.xsd (EX-101.SCH) — 90KB
• laws-20231231_cal.xml (EX-101.CAL) — 169KB
• laws-20231231_def.xml (EX-101.DEF) — 451KB
• laws-20231231_lab.xml (EX-101.LAB) — 1066KB
• laws-20231231_pre.xml (EX-101.PRE) — 812KB
• laws-20231231_htm.xml (XML) — 2111KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 14 Item 1B. Unresolved Staff Comments 24 Item 1 C. Cybersecurity 24 Item 2.

Properties

Properties 25 Item 3.

Legal Proceedings

Legal Proceedings 25 Item 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. [RESERVED] 26 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 42 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 43 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 88 Item 9A.

Controls and Procedures

Controls and Procedures 88 Item 9B. Other Information 92 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 92 PART III Item 10. Directors, Executive Officers and Corporate Governance 93 Item 11.

Executive Compensation

Executive Compensation 93 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 93 Item 13. Certain Relationships and Related Transactions, and Director Independence 94 Item 14. Principal Account ant Fees and Services 94 PART IV Item 15. Exhibit and Financial Statement Schedules 95 Item 16. Form 10-K Summary 8 0

Signatures

Signatures 98 2 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K contains certain "forward-looking statements" within the meaning of the federal securities laws that involve risks and uncertainties. Terms such as "aim," "anticipate," "believe," "contemplates," "continues," "could," "ensure," "estimate," "expect," "forecasts," "if," "intend," "likely," "may," "might," "objective," "outlook," "plan," "positioned," "potential," "predict," "probable," "project," "shall," "should," "strategy," "will," "would," and variations of them and other words and terms of similar meaning and expression (and the negatives of such words and terms) are intended to identify forward-looking statements. Forward-looking statements can also be identified by the fact that they do not relate strictly to historical or current facts. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are based on management's current expectations, intentions or beliefs as of the date they are made and are subject to a number of factors, assumptions and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact our business, financial condition and results of operations include: inventory obsolescence; work stoppages and other disruptions at transportation centers or shipping ports; the reliance of TestEquity Acquisition, LLC ("TestEquity") on a significant supplier for a significant amount of its product inventory; changes in our customers, product mix and pricing strategy; disruptions of our information and communication systems; cyber-attacks or other information security incidents; the inability to successfully recruit, integrate and retain productive sales representatives; diff

BUSINESS

ITEM 1. BUSINESS. Overview Distribution Solutions Group, Inc., a Delaware corporation ("DSG"), is a global specialty distribution company providing value-added distribution solutions to the maintenance, repair and operations ("MRO"), original equipment manufacturer ("OEM") and industrial technology markets. DSG has three principal operating companies: Lawson Products, Inc., an Illinois corporation ("Lawson"), TestEquity Acquisition, LLC, a Delaware limited liability company ("TestEquity"), and 301 HW Opus Holdings, Inc., a Delaware corporation conducting business as Gexpro Services ("Gexpro Services"). The complementary distribution operations of Lawson, TestEquity and Gexpro Services were combined on April 1, 2022 to create a global specialty distribution company. A summary of the Mergers (as defined below), including the legal entities party to the transactions and the stock consideration, is presented below. 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 180,000 distinct customers in several diverse end markets supported by approximately 3,700 dedicated employees and strong vendor partnerships. DSG ships from strategically located distribution and service centers to customers in North America, Europe, Asia, South America and the Middle East. DSG was originally incorporated in Illinois in 1952 and was reincorporated in Delaware in 1982. 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. Combination with TestEquity and Gexpro Services On December 29, 2021, DSG entered into: an Agreement and Plan of Merger (

View Full Filing

View this 10-K filing on SEC EDGAR