Distribution Solutions Group, Inc.DSGR
Distribution Solutions Group, Inc. Segments Disclosure
Note 14 – Segment Information
As a result of the Source Atlantic acquisition in the third quarter of 2024, discussed in Note 3 – Business and Asset Acquisitions, the Company realigned its reportable segments to align with its business strategy and the manner in which the CODM assesses performance and strategic execution and makes decisions regarding the allocation of resources. The Company’s CODM is the Chief Executive Officer of DSG. For each reportable segment, the CODM uses segment operating income (loss) to allocate resources (including employees and financial resources) in a way to manage and grow margins.
Beginning in the third quarter of 2024, the Company has four reporting segments: Lawson, TestEquity, Gexpro Services and Canada Branch Division. Canada Branch Division includes the results of the Bolt and Source Atlantic subsidiaries. No changes were made to the Lawson, TestEquity and Gexpro Services reportable segments. For additional details about our segment realignment in the third quarter of 2024, see Note 1 – Nature of Operations and Basis of Presentation.
The segment realignment had no impact on our financial condition or results of operations. Prior period segment results have been recast to reflect our new reportable segments. A description of our reportable segments is as follows:
Lawson is a distributor of specialty products and services to the industrial, commercial, institutional and governmental MRO marketplace. Lawson primarily distributes MRO products to its customers through a network of sales representatives and an inside sales channel throughout the United States and Canada.
TestEquity is a distributor of test and measurement equipment and solutions, industrial and electronic production supplies, vendor managed inventory programs, and converting, fabrication and adhesive solutions from its leading manufacturer partners supporting the aerospace and defense, wireless and communication, semiconductors, industrial electronics and automotive, and electronics manufacturing industries.
Gexpro Services is a global supply chain solutions provider, specializing in the development of mission critical production line management, aftermarket and field installation programs.
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.
The Company also has an “All Other” category which includes unallocated DSG holding company costs that are not directly attributable to the ongoing operating activities of our reportable segments. There is no revenue associated with the All Other category.
Financial information for the Company’s segments and reconciliations of that information to the consolidated financial statements is presented below.
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue | |||||||||||||||||
| Lawson | $ | 481,088 | $ | 469,044 | $ | 468,711 | |||||||||||
| TestEquity | 783,237 | 771,180 | 641,768 | ||||||||||||||
| Gexpro Services | 496,655 | 440,723 | 405,733 | ||||||||||||||
| Canada Branch Division | 221,426 | 125,099 | 55,890 | ||||||||||||||
| Intersegment revenue elimination | (2,383) | (1,942) | (1,700) | ||||||||||||||
| Total revenue | $ | 1,980,023 | $ | 1,804,104 | $ | 1,570,402 | |||||||||||
| Cost of goods sold | |||||||||||||||||
| Lawson | $ | 217,058 | $ | 211,784 | $ | 203,251 | |||||||||||
| TestEquity | 613,707 | 595,368 | 499,916 | ||||||||||||||
| Gexpro Services | 341,685 | 302,228 | 284,664 | ||||||||||||||
| Canada Branch Division | 147,910 | 82,897 | 32,396 | ||||||||||||||
| Intersegment cost of goods sold elimination | (2,375) | (1,948) | (1,700) | ||||||||||||||
| Total cost of goods sold | $ | 1,317,985 | $ | 1,190,329 | $ | 1,018,527 | |||||||||||
| Selling, general and administrative expenses | |||||||||||||||||
| Lawson | $ | 245,267 | $ | 242,705 | $ | 232,962 | |||||||||||
| TestEquity | 155,125 | 171,845 | 158,317 | ||||||||||||||
| Gexpro Services | 106,159 | 101,962 | 94,069 | ||||||||||||||
| Canada Branch Division | 65,802 | 36,178 | 17,763 | ||||||||||||||
| All Other | 11,422 | 5,130 | 5,773 | ||||||||||||||
| Total operating expenses | $ | 583,775 | $ | 557,820 | $ | 508,884 | |||||||||||
| Operating income (loss) | |||||||||||||||||
| Lawson | $ | 18,763 | $ | 14,555 | $ | 32,498 | |||||||||||
| TestEquity | 14,405 | 3,967 | (16,465) | ||||||||||||||
| Gexpro Services | 48,811 | 36,533 | 27,000 | ||||||||||||||
| Canada Branch Division | 7,714 | 6,024 | 5,731 | ||||||||||||||
| All Other | (11,430) | (5,124) | (5,773) | ||||||||||||||
| Total operating income (loss) | $ | 78,263 | $ | 55,955 | $ | 42,991 | |||||||||||
| Reconciliation to income (loss) before income taxes | |||||||||||||||||
| Interest expense | $ | (55,352) | $ | (55,145) | $ | (42,774) | |||||||||||
| Change in fair value of earnout liabilities | (1,000) | (988) | 758 | ||||||||||||||
| Other income (expense), net | (2,500) | (358) | (2,982) | ||||||||||||||
| Income (loss) before income taxes | $ | 19,411 | $ | (536) | $ | (2,007) | |||||||||||
Segment revenue includes revenue from sales to external customers and intersegment revenue from sales transactions between segments. The Company accounts for intersegment sales similar to third party transactions that are conducted on an arm’s-length basis and reflect current market prices. Intersegment revenue is eliminated in consolidation. Segment revenue and the elimination of intersegment revenue was as follows:
| (in thousands) | Lawson | TestEquity | Gexpro Services | Canada Branch Division | Elimination | Total | ||||||||||||||||||||||||||||||||
Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Revenue from external customers | $ | 480,768 | $ | 782,367 | $ | 495,495 | $ | 221,393 | $ | — | $ | 1,980,023 | ||||||||||||||||||||||||||
| Intersegment revenue | 320 | 870 | 1,160 | 33 | (2,383) | — | ||||||||||||||||||||||||||||||||
| Revenue | $ | 481,088 | $ | 783,237 | $ | 496,655 | $ | 221,426 | $ | (2,383) | $ | 1,980,023 | ||||||||||||||||||||||||||
Year Ended December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Revenue from external customers | $ | 468,976 | $ | 770,866 | $ | 439,163 | $ | 125,099 | $ | — | $ | 1,804,104 | ||||||||||||||||||||||||||
| Intersegment revenue | 68 | 314 | 1,560 | — | (1,942) | — | ||||||||||||||||||||||||||||||||
| Revenue | $ | 469,044 | $ | 771,180 | $ | 440,723 | $ | 125,099 | $ | (1,942) | $ | 1,804,104 | ||||||||||||||||||||||||||
Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
| Revenue from external customers | $ | 468,379 | $ | 641,643 | $ | 404,490 | $ | 55,890 | $ | — | $ | 1,570,402 | ||||||||||||||||||||||||||
| Intersegment revenue | 332 | 125 | 1,243 | — | (1,700) | — | ||||||||||||||||||||||||||||||||
| Revenue | $ | 468,711 | $ | 641,768 | $ | 405,733 | $ | 55,890 | $ | (1,700) | $ | 1,570,402 | ||||||||||||||||||||||||||
Total assets by segment and long-lived assets by geographic area were as follows:
| December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Total assets by segment | |||||||||||
| Lawson | $ | 548,169 | $ | 524,077 | |||||||
| TestEquity | 624,829 | 654,315 | |||||||||
| Gexpro Services | 351,552 | 331,811 | |||||||||
| Canada Branch Division | 210,625 | 199,362 | |||||||||
| All Other | 13,446 | 17,690 | |||||||||
| Total | $ | 1,748,621 | $ | 1,727,255 | |||||||
Long-lived assets by geographic area(1) | |||||||||||
| United States | $ | 796,554 | $ | 818,100 | |||||||
| Canada | 142,183 | 138,218 | |||||||||
| Europe | 31,006 | 30,345 | |||||||||
| Pacific Rim | 5,967 | 4,751 | |||||||||
| Latin America | 3,224 | 3,615 | |||||||||
| Total | $ | 978,934 | $ | 995,029 | |||||||
(1) Long-lived assets include property, plant and equipment, rental equipment, goodwill, intangibles, right of use operating lease assets, and other assets.
Refer to Note 4 – Revenue Recognition for disaggregated revenue by geographic area.
Capital expenditures and depreciation and amortization by segment were as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Capital expenditures | |||||||||||||||||
| Lawson | $ | 9,459 | $ | 5,163 | $ | 6,626 | |||||||||||
| TestEquity | 25,103 | 12,692 | 2,955 | ||||||||||||||
| Gexpro Services | 3,830 | 4,269 | 5,053 | ||||||||||||||
| Canada Branch Division | 2,103 | 1,069 | 703 | ||||||||||||||
| All Other | — | — | — | ||||||||||||||
| Total | $ | 40,495 | $ | 23,193 | $ | 15,337 | |||||||||||
| Depreciation and amortization | |||||||||||||||||
| Lawson | $ | 27,074 | $ | 24,349 | $ | 19,532 | |||||||||||
| TestEquity | 33,032 | 30,799 | 26,002 | ||||||||||||||
| Gexpro Services | 14,128 | 15,489 | 15,986 | ||||||||||||||
| Canada Branch Division | 6,645 | 3,739 | 2,068 | ||||||||||||||
| All Other | — | — | — | ||||||||||||||
| Total | $ | 80,879 | $ | 74,376 | $ | 63,588 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Mar 7, 2024 | |
| 2022 | Mar 14, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Mar 4, 2019 | |
| 2017 | Feb 22, 2018 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.