Distribution Solutions Group Reports 10.5% Revenue Growth in Q2 2026

Distribution Solutions Group, Inc. (DSG) reported a significant increase in financial performance for the second quarter of 2026, with total revenue reaching $557.7 million, up from $502.4 million in the same period last year, marking a 10.5% increase. The company’s net income also rose to $8.5 million, compared to $5.0 million in the prior year, resulting in a basic earnings per share of $0.18, up from $0.11. For the first half of 2026, DSG's revenue totaled $1.05 billion, a 7.5% increase from $980.5 million in the first half of 2025, while net income increased to $8.9 million from $8.3 million.

The company attributed its revenue growth to a combination of organic growth and contributions from its recent acquisition of Eastern Valve & Control Specialties Ltd., which added approximately $4.1 million in revenue. The gross profit for the second quarter was $180.1 million, slightly up from $170.1 million, although the gross profit margin decreased to 32.3% from 33.9% due to increased costs and a shift in sales mix. Selling, general, and administrative expenses rose to $152.3 million from $143.3 million, reflecting investments to support revenue growth.

In terms of operational metrics, DSG's customer base and engagement levels showed positive trends. The company reported an increase in accounts receivable, which rose to $331.6 million from $271.3 million, indicating higher sales volume. The company also completed the acquisition of Eastern Valve in March 2026, which is expected to enhance its footprint in the Canadian market. This acquisition was funded through borrowings under its amended credit agreement, which now includes a $400 million revolving credit facility.

Looking ahead, DSG has entered into a merger agreement with entities affiliated with LKCM Headwater, which is expected to take the company private. The merger, announced on July 15, 2026, will convert each outstanding share of DSG common stock into $35.00 in cash, subject to various closing conditions. The company has indicated that it will continue to pursue organic growth strategies while navigating the complexities of the merger process, which may limit its ability to engage in further acquisitions during this period.

Overall, DSG's financial results reflect a solid performance driven by strategic acquisitions and organic growth, despite challenges such as rising costs and market conditions. The company remains focused on enhancing its operational capabilities and expanding its market presence while preparing for the upcoming merger.