Distribution : Investor Presentation Q4 2023

NASDAQ: DSGR

2023 Financial Results

March 7, 2024

Safe Harbor Statement

Cautionary Note Regarding Forward-Looking Statements

This presentation contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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. Such forward- looking statements are based on current expectations and involve inherent risks, uncertainties and assumptions, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. Distribution Solutions Group ("DSG") can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and DSG cautions readers not to place undue reliance on such statements, which speak only as of the date made. DSG undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Certain risks associated with DSG's business are also discussed from time to time in the reports DSG files with the SEC, including DSG's Annual Report on Form 10-K, DSG's Quarterly Reports on Form 10-Q and DSG's Current Reports on Form 8-K, which should be reviewed carefully. In addition, the following factors, among others, could cause actual outcomes and results to differ materially from those discussed in the forward-looking statements: (i) unanticipated difficulties, expenditures or any problems arising after combining the businesses of Lawson Products, TestEquity and Gexpro Services (the "merger"), which may result in DSG not operating as effectively and efficiently as expected; (ii) the risk that stockholder litigation in connection with the merger or any other acquisition or business combination completed by DSG or any of its subsidiaries results in significant costs of defense, indemnification and liability; and (iii) the risks that DSG may encounter difficulties integrating the business of DSG with the business of other companies that DSG has acquired or has otherwise combined with, that DSG may not achieve the anticipated synergies contemplated with respect to any such business or transactions and that certain assumptions with respect to such business or transactions could prove to be inaccurate.

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Earnings Call Agenda

Today's Conference Call Will Discuss Results Primarily on an Adjusted (Non-GAAP) and Comparable Operations Basis.

Agenda

• 2023 Full Year and Q4 Consolidated Highlights & Financial Results
• Segment Highlights & Financial Results
• Q&A

DSG's Board of Directors approved and declared a two-for-one stock split in Q3. Accordingly, all share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split.

2022 GAAP results reported under Reverse Merger Accounting. Combined Gexpro Services/TestEquity is accounting acquiror of Lawson Products given common control of entities and thus, include Lawson Products results commencing on the Merger date of April 1, 2022.

See appendix for GAAP to Non-GAAP reconciliations.

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2023 Year in Review

Demonstrated our ability to execute strategic goals; expanding revenues, margins, enterprise value, and generating significant operating cash flow

• Accelerated growth through a disciplined execution of our M&A playbook
• • Accretive acquisition and integration of Hisco underway
• Key initiatives for MRO Focus
• • Salesforce transformation investments to drive productivity improvement in field sales reps, channel expansion through inside sales team
  • New product expansion
• Key initiatives for OEM Focus
• • Upstream & downstream synergies in large and diverse end markets
  • Gross margin expansion despite headwinds
• Key initiatives for Industrial Technologies focus
• • Meaningful expansion to DSG's scale and footprint in North America
  • Margin improvements, strategic cost-outs and system consolidation
  • Creation of one digital platform
• Capital building initiatives of rights offering and expanded share repurchase plan
• Built collaborative teams with a results-oriented culture

2023 Full Year and Q4 Highlights

• Full year revenue increased 36.4%; adjusted for Lawson pre-merger, comparable pro forma revenue increased 23.7% over 2022.
• Q4 revenue up 23.2% from acquired revenue. Two-year stacked organic growth up 10% in Q4; Q4 2023 organic revenue down 6.4%. Technology end-market, renewables maintenance and capital spending continued to show softness.
• Full year adjusted EBITDA increased 27.6% or $34M to $157M or 10.0% of sales.
• Q4 adjusted EBITDA of $34M, flat vs. year ago and 8.4% of sales.
• Full year loss per diluted share of $0.20 compared to earnings per diluted share of $0.21 in 2022. Non-GAAP adjusted diluted EPS of $1.42 compared to $1.47 a year ago on 44.9M shares outstanding compared to 35.1M shares outstanding.
• Generated $102M of full year operating cash flows ($28M during Q4) from working capital efficiencies and improved profitability.
• Deleveraged the company to 2.9x; ended the year with $100M of cash and approx. $198M of availability under revolving credit facility.

Leading Specialty Industrial Distribution Platform

2023 Consolidated Financial Highlights

Reported Revenue and Adjusted EBITDA

• Full year revenue of $1.57B, an increase of $419.0M or 36.4% over 2022; inclusive of Lawson pre-merger, pro forma revenue up $301.1M or 23.7% over 2022.
• Q4 revenue of $405.2M; up $76.4M or 23.2% due to 2023 Hisco acquisition. Q4 two-year stacked organic growth up 10% while Q4 organic down 6.4% primarily from continued softness in technology end-market, renewables maintenance and capital spending.
• Q4 adjusted EBITDA flat vs. year ago at $33.9M or 8.4% of sales.
• Full year adjusted EBITDA of $157.0M; up 27.6% over 2022.

Lawson Products - MRO Focus

Results are presented on an Adjusted (Non-GAAP) and continuing operations basis. See appendix of this presentation and press release for reconciliations.

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TestEquity - Industrial Technologies Focus

Results are presented on an Adjusted (Non-GAAP) and continuing operations basis. See appendix of this presentation and press release for reconciliations.

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