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Investing.com -- Distribution Solutions Group, Inc. (NASDAQ:DSGR) reported first quarter earnings that beat analyst expectations, but fell short on revenue, sending its stock down 12.2% following the announcement.
The specialty distribution company posted adjusted earnings per share of $0.31, surpassing the analyst consensus of $0.25. However, revenue came in at $478.03 million, missing estimates of $500.2 million.
Despite the revenue miss, DSG saw a 14.9% increase in sales compared to the same quarter last year, driven by $50.8 million in revenue from five acquisitions closed in 2024. Organic average daily sales grew 4.3% YoY.
Adjusted EBITDA rose 18.6% to $42.8 million, or 9.0% of sales, up from 8.7% in the prior year quarter. The company noted that excluding the impact of the Source Atlantic acquisition, adjusted EBITDA margin would have been 9.6%.
"Our financial results met expectations for the quarter, despite macro uncertainties that affected all U.S. companies," said CEO Bryan King. He added that the company saw year-over-year net margin expansion in each of its three verticals on a comparable basis.
DSG ended the quarter with total liquidity of $304.8 million and net debt leverage of 3.6x. The company repurchased $11.2 million worth of shares during the quarter.
Looking ahead, King said DSG remains "cautiously optimistic" about 2025, noting the company is well-positioned to help customers navigate alternative sourcing and services as trade policies develop.
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