Financial Analysis

Note 3 Business and Asset Acquisitions DSG and its operating companies acquired businesses during 2024 and 2023. The acquisitions were accounted for under ASC 805, the acquisition method of accounting. For each acquisition, the allocation of consideration exchanged to the assets acquired and liabilities assumed was based on estimated acquisition-date fair values. The final valuations were completed within the one-year measurement period following the respective acquisition date, and any adjustments were recorded in the period in which the adjustments were determined. 2024 Acquisitions ConRes Test Equipment On November 18, 2024 , DSG acquired the assets of ConRes Test Equipment, (ConRes TE and the ConRes TE Transaction ), for a purchase price of approximately $17.0 million . These assets were acquired to expand TestEquitys test equipment offerings and value-add service capabilities in all of our end markets. The results of operations from the assets acquired from ConRes TE are included within the TestEquity reportable segment. The acquisition was funded using DSGs cash on hand and its revolving credit facility. This acquisition was accounted for as an asset acquisition because substantially all of the fair value of the acquired assets were concentrated in property, plant and equipment. The following table summarizes the allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed: ConRes TE (in thousands) November 18, 2024 Acqui …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 15 Commitments and Contingencies From time to time, the Company is a party to various legal proceedings that have arisen in the ordinary course of business. The Company records accruals for loss contingencies when losses are probable and reasonably estimable. The Company is not currently aware of any litigation matters or loss contingencies that would reasonably be expected to have a material adverse effect on our business, financial position, results of operations or cash flows. Defined Contribution Plan The Company provides a 401(k) defined contribution plan to allow employees a pre-tax investment vehicle to save for retirement. The Company made contributions to the 401(k) plan of $9.4 million, $7.5 million and $7.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 9 Debt The Companys outstanding long-term debt was comprised of the following: December 31, (in thousands) 2025 2024 Senior secured revolving credit facility $ 3,948 $ Senior secured term loan 700,000 215,625 Senior secured delayed draw term loan 44,375 Incremental term loans 479,625 Other revolving line of credit 470 226 Total debt 704,418 739,851 Less: current portion of long-term debt (35,470) (40,476) Less: deferred financing costs (4,752) (5,472) Total long-term debt $ 664,196 $ 693,903 On December 18, 2025, the Company entered into the Second Amended and Restated Credit Agreement (the Amended Credit Agreement), which amended and restated the Amended and Restated Credit Agreement, dated as of April 1, 2022 (as it had been amended from time to time prior to the date of the Amended Credit Agreement, the Original Credit Agreement), by and among the Company, certain subsidiaries of the Company as borrowers or guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. As amended, the Amended Credit Agreement provides for (i) a $400 million senior secured revolving credit facility, with a $25 million letter of credit sub-facility and a $10 million swingline loan sub-facility, (ii) a $700 million senior secured initial term loan facility and (iii) the Company to increase the commitments thereunder from time to time by up to $500 million in the aggregate, subject to, among other things, the receipt of additional commitments from existing a …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to): Year Ended December 31, (in thousands) 2025 2024 2023 United States $ 1,459,885 $ 1,389,754 $ 1,253,401 Canada 293,004 192,213 141,125 Europe 64,711 58,144 79,643 Pacific Rim 32,247 20,584 13,515 Latin America 117,833 131,345 74,577 Other 14,726 14,006 9,841 Intersegment revenue elimination (2,383) (1,942) (1,700) Total revenue $ 1,980,023 $ 1,804,104 $ 1,570,402

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Note 10 Stock-Based Compensation Equity Compensation Plans On October 17, 2022, the Board of Directors approved and adopted the Distribution Solutions Group, Inc. Equity Compensation Plan, as amended and restated, effective October 17, 2022, and as amended November 10, 2022 (the Amended and Restated Equity Plan). The Amended and Restated Equity Plan provides for the grant of nonqualified and incentive stock options, stock awards and stock units to officers and employees of the Company. The Amended and Restated Equity Plan also provides for the grant of option rights and restricted stock to non-employee directors. Non-employee directors are limited to grants of no more than 60,000 shares of common stock in any calendar year and other than non-employee directors are limited to grants of no more than 500,000 shares of common stock in any calendar year. The Amended and Restated Equity Plan is administered by the Compensation Committee of the Board of Directors, or its designee, which as administrator of the plan, has the authority to select plan participants, grant awards, and determine the terms and conditions of the awards. As of December 31, 2025, the Company had approximately 141,000 shares of common stock still available under the Amended and Restated Equity Plan. The Company also has a Stock Performance Rights Plan (SPR Plan) that provides for the issuance of Stock Performance Rights (SPRs) that allow non-employee directors, officers and key employees to receive cash awards …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 6 Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill by segment were as follows: (in thousands) Lawson TestEquity Gexpro Services Canada Branch Division Total Balance at December 31, 2023 $ 155,915 $ 164,990 $ 55,743 $ 23,277 $ 399,925 Acquisitions (1) 37,177 (110) 1,372 28,942 67,381 Impact of foreign exchange rates (494) (773) (3,250) (4,517) Balance at December 31, 2024 192,598 164,880 56,342 48,969 462,789 Acquisitions (1) 168 849 1,017 Impact of foreign exchange rates 277 1,464 2,358 4,099 Balance at December 31, 2025 $ 192,875 $ 164,880 $ 57,974 $ 52,176 $ 467,905 (1) Refer to Note 3 Business and Asset Acquisitions for information related to measurement period adjustments. Intangible Assets The gross carrying amount and accumulated amortization for definite-lived intangible assets were as follows: December 31, 2025 December 31, 2024 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 141,637 $ (60,640) $ 80,997 $ 141,654 $ (45,386) $ 96,268 Customer relationships 274,844 (131,341) 143,503 272,051 (100,867) 171,184 Other (1) 7,894 (6,339) 1,555 8,310 (5,999) 2,311 Total $ 424,375 $ (198,320) $ 226,055 $ 422,015 $ (152,252) $ 269,763 (1) Other primarily consists of non-compete agreements. Amortization expense for definite-lived intangible assets is included in Selling, general and administrative expenses in the Consolidated Stat …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Note 13 Income Taxes Income (loss) from operations before income taxes consisted of the following: Year Ended December 31, (in thousands) 2025 2024 2023 United States $ (1,552) $ (23,598) $ (24,949) Foreign 20,963 23,062 22,942 Total $ 19,411 $ (536) $ (2,007) Income taxes paid, net of refunds received consisted of the following: Year Ended December 31, (in thousands) 2025 U.S. federal $ 4,897 U.S. state and local $ 2,874 Foreign Canada $ 4,966 Mexico 2,680 Hungary 1,191 Other foreign jurisdictions 1,579 Total foreign $ 10,416 Total income taxes paid $ 18,187 Provision (benefit) for income taxes from operations consisted of the following: Year Ended December 31, (in thousands) 2025 2024 2023 Current income tax expense: U.S. federal $ 3,569 $ 3,035 $ 4,961 U.S. state 2,432 2,633 2,388 Foreign 9,073 7,777 7,639 Total $ 15,074 $ 13,445 $ 14,988 Deferred income tax expense (benefit): U.S. federal $ (72) $ (3,554) $ (8,101) U.S. state (1,317) (1,603) 1,232 Foreign (2,619) (1,492) (1,159) Total $ (4,008) $ (6,649) $ (8,028) Total income tax expense (benefit): U.S. federal $ 3,497 $ (519) $ (3,141) U.S. state 1,115 1,030 3,620 Foreign 6,454 6,285 6,481 Total $ 11,066 $ 6,796 $ 6,960 The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures on a prospective basis beginning with the year ended December 31, 2025. The reconciliation between the effective income tax rate and the statutory federal rate for operations for the year ended December 31, …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 7 Leases The Company leases property used for warehousing, distribution centers, office space, branch locations, equipment and vehicles. The components of lease cost were as follows (in thousands): Year Ended December 31, Lease Type Classification 2025 2024 2023 Operating lease expense (1) Operating expenses $ 28,264 $ 23,958 $ 21,131 Financing lease amortization Operating expenses 582 612 546 Financing lease interest Interest expense 103 108 93 Financing lease expense 685 720 639 Sublease income (2) (679) (425) Net lease cost $ 28,270 $ 24,253 $ 21,770 (1) Includes short-term lease expense, which is immaterial. (2) The Company subleases excess property to third-party tenants. Sublease income is recognized on a straight-line basis over the sublease agreement and is recorded as an offset to operating lease expense. The value of net assets and liabilities related to our operating and finance leases as of December 31, 2025 and December 31, 2024 was as follows (in thousands): December 31, Lease Type 2025 2024 Total right of use operating lease assets $ 111,117 $ 91,962 Total right of use financing lease assets 1,573 1,702 Total lease assets $ 112,690 $ 93,664 Total current operating lease obligation $ 20,030 $ 18,413 Total current financing lease obligation 594 538 Total current lease obligation $ 20,624 $ 18,951 Total long-term operating lease obligation $ 98,022 $ 76,759 Total long-term financing lease obligation 799 999 Total long-term lease obligation $ 98,821 $ 77,758 T …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements - Adopted From time to time, the Financial Accounting Standards Board (the FASB) or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update (ASU). The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its consolidated financial condition, results of operations, cash flows or disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to require greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. The pronouncement is effective on a prospective basis with retrospective application permitted for annual periods beginning after December 15, 2024, with early adoption permitted. The adoption of ASU 2023-09 has been applied on a prospective basis to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. The Company adopted this guidance on January 1, 2025. The adoption had no material impact on the Companys financial condition, results of operations or cash flows. Recent Accounting Pronoun cements - Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income, which requires disclosure of disaggregated informatio …

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Note 16 Related Party Transactions Consulting Services Individuals employed by LKCM Headwater Operations, LLC, a related party of LKCM, have provided the Company with certain consulting services for interim executive management in addition to assisting in identifying cost savings, revenue enhancements and operational synergies of the combined companies. For the years ended December 31, 2025, 2024 and 2023, expense of $1.1 million, $1.2 million and $0.6 million, respectively, was recorded in Selling, general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Income (Loss), reflecting expenses incurred for these consulting services. Principal Executive Office Lease In connection with the Companys headquarters move to Fort Worth, Texas in 2023, the Company has been utilizing office space in a building that is leased by LKCM. The Company is not charged any rent or other amounts for the use of the office space. Significant Shareholder LKCM, entities affiliated with LKCM and J. Bryan King (President and Chief Executive Officer of DSG and Chairman of the DSG Board of Directors), including private investment partnerships for which LKCM serves as investment manager, beneficially owned in the aggregate approximately 36.4 million shares of DSG common stock as of December 31, 2025, representing approximately 78.7% of the outstanding shares of DSG common stock as of December 31, 2025. Rights Offering Certain entities affiliated with LKCM and J. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Note 4 Revenue Recognition Disaggregation of Revenue The Companys revenue is primarily comprised of product sales to customers. The Company has disaggregated revenue by geographic area and by segment as it most reasonably depicts the amount, timing and uncertainty of revenue and cash flows generated from our contracts with customers. Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to): Year Ended December 31, (in thousands) 2025 2024 2023 United States $ 1,459,885 $ 1,389,754 $ 1,253,401 Canada 293,004 192,213 141,125 Europe 64,711 58,144 79,643 Pacific Rim 32,247 20,584 13,515 Latin America 117,833 131,345 74,577 Other 14,726 14,006 9,841 Intersegment revenue elimination (2,383) (1,942) (1,700) Total revenue $ 1,980,023 $ 1,804,104 $ 1,570,402 See Note 14 Segment Information for disaggregation of revenue by segment. Rental Revenue TestEquity rents new and used electronic test and measurement equipment to customers in multiple industries. Lawso n leases parts washer machines to customers. This leased equipment is included in Rental equipment, net in the Consolidated Balance Sheets, and rental revenue is included in Revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss) . The unearned rental revenue related to customer prepayments on equipment leases was nominal at December 31, 2025 and December 31, 2024 . Rental revenue from operating leases: Year Ended December 31, (in thousands) 2025 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

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 Companys 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 c …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 2 Summary of Significant Accounting Policies Revenue Recognition Revenue from Contracts with Customers: Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring a product or providing a service. A majority of the Companys revenue is short cycle in nature with shipments within one year of the order. A small portion of the Companys revenue derives from contracts extending over one year and in some cases may have optional renewal terms if both parties agree to renew. The Companys payment terms generally range between 10 to 120 days and vary by contract, the types of products sold and the volume of products sold, among other factors. Revenue includes product sales, services and billings for shipping charges, net of discounts, expected returns, rebates and sales tax. Estimates for rebates and expected returns is based on historical experience. The Company includes shipping costs billed to customers in Revenue and the related shipping costs in Cost of goods sold in the Consolidated Statements of Operations and Comprehensive Income (Loss). Performance Obligations : A m ajority of the Companys contracts have a performance obligation which represents, in most cases, the product being sold to the customer. Some contracts include a second performance obligation to provide additional Vendor Managed Inventory (VMI) services primarily related to monitoring and stocking. Although the Company has identified that it offers some custom …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Note 11 Stockholders Equity Stock Split On August 15, 2023, DSG announced that its Board of Directors approved and declared the Stock Split which entitled each stockholder of record as of the close of business on August 25, 2023, to receive one additional share of DSG common stock for each share of DSG common stock then-held. The additional shares were distributed after the close of trading on August 31, 2023, and shares of DSG common stock began trading at the split-adjusted basis on September 1, 2023. Accordingly, all share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split. Stockholders equity has been retroactively adjusted, where applicable, to give effect to the Stock Split for all periods presented by reclassifying the par value of the additional shares issued in connection with the Stock Split to Common stock from Capital in excess of par value in the Consolidated Balance Sheets . In order to implement the Stock Split, on August 31, 2023, DSG filed a Third Amended and Restated Certificate of Incorporation of DSG with the Secretary of State of the State of Delaware to increase the number of authorized shares of DSG common stock from 35,000,000 to 70,000,000, which became effective on that date. The Stock Split did not change the $1.00 par value of DSG common stock. Rights Offering The Company completed a subscription rights offering on May 9, 2023 (the Rights Offering), that raised gross proceeds of approxim …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Note 3 Business Acquisitions DSG and its operating companies acquired one business during the first quarter of 2026. The acquisition was accounted for under ASC 805, the acquisition method of accounting. The allocation of consideration exchanged to the assets acquired and liabilities assumed was based on estimated acquisition-date fair values. The final valuations will be completed within the one-year measurement period following the acquisition date, and any adjustments will be recorded in the period in which the adjustments are determined. On March 9, 2026, DSG acquired all of the issued and outstanding stock of Eastern Valve & Control Specialties Ltd. (Eastern Valve), with a purchase price of approximately $16.2 million, net of cash acquired of $0.1 million. Eastern Valve is located in Paradise, Newfoundland, Canada and supplies and services industrial valve products throughout Atlantic Canada. Eastern Valve was acquired to expand DSGs operating footprint in the Canadian market. The results of operations of Eastern Valve are included within the Canada Branch Division reportable segment. The acquisition was funded with borrowings under the Companys Amended Credit Agreement. Refer to Note 9 Debt for information about the Amended Credit Agreement. The following table summarizes the allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed, including the allocation to other intangible assets acquired: Eastern Valve (in th …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 8 Debt The Companys outstanding long-term debt was comprised of the following: (in thousands) March 31, 2026 December 31, 2025 Senior secured revolving credit facility $ 44,930 $ 3,948 Senior secured term loan 691,250 700,000 Other revolving line of credit 422 470 Total debt 736,602 704,418 Less: current portion of long-term debt (35,422) (35,470) Less: deferred financing costs (4,512) (4,752) Total long-term debt $ 696,668 $ 664,196 On December 18, 2025, the Company entered into the Second Amended and Restated Credit Agreement (the Amended Credit Agreement), which amended and restated the Amended and Restated Credit Agreement, dated as of April 1, 2022 (as it had been amended from time to time prior to the date of the Amended Credit Agreement, the Original Credit Agreement), by and among the Company, certain subsidiaries of the Company as borrowers or guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. As amended, the Amended Credit Agreement provides for (i) a $400 million senior secured revolving credit facility, with a $25 million letter of credit sub-facility and a $10 million swingline loan sub-facility, (ii) a $700 million senior secured initial term loan facility and (iii) the Company to increase the commitments thereunder from time to time by up to $500 million in the aggregate, subject to, among other things, the receipt of additional commitments from existing and/or new lenders and pro forma compliance with certain fin …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to): Three Months Ended March 31, (in thousands) 2026 2025 United States $ 366,236 $ 357,132 Canada 69,293 67,630 Europe 17,806 13,831 Pacific Rim 9,516 7,772 Latin America 31,233 28,637 Other 2,498 3,681 Intersegment revenue elimination (587) (654) Total revenue $ 495,995 $ 478,029

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Note 9 Stock-Based Compensation The Company recorded stock-based compensation expense of $2.4 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively, in Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) . A portion of the Companys stock-based awards are liability-classified. Accordingly, changes in the market value of DSG common stock may result in stock-based compensation expense or benefit in certain periods. A stock-based compensation liability of $0.3 million a s of March 31, 2026 and $0.3 million as of December 31, 2025 was included in Accrued expenses and other current liabilities in the Unaudited Condensed Consolidated Balance Sheets. …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 6 Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill by segment were as follows: (in thousands) Lawson TestEquity Gexpro Services Canada Branch Division Total Balance at December 31, 2025 $ 192,875 $ 164,880 $ 57,974 $ 52,176 $ 467,905 Acquisitions 7,909 7,909 Impact of foreign exchange rates (84) (280) (921) (1,285) Balance at March 31, 2026 $ 192,791 $ 164,880 $ 57,694 $ 59,164 $ 474,529 Intangible Assets The gross carrying amount and accumulated amortization for definite-lived intangible assets were as follows: March 31, 2026 December 31, 2025 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 142,845 $ (64,655) $ 78,190 $ 141,637 $ (60,640) $ 80,997 Customer relationships 276,258 (137,689) 138,569 274,844 (131,341) 143,503 Other (1) 7,899 (6,547) 1,352 7,894 (6,339) 1,555 Total $ 427,002 $ (208,891) $ 218,111 $ 424,375 $ (198,320) $ 226,055 (1) Other primarily consists of non-compete agreements. Amortization expense for definite-lived intangible assets is included in Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as follows: Three Months Ended March 31, (in thousands) 2026 2025 Amortization expense for intangible assets $ 11,004 $ 11,585 The estimated aggregate amortization expense for the remaining year 2026 and each of the next four …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Note 12 Income Taxes The Company recorded income tax expense of $0.4 million, a 49.5% effective tax rate for the three months ended March 31, 2026. An income tax expense of $2.3 million, a 40.9% effective tax rate was recorded for the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 differs from the U.S. statutory rate primarily due to state taxes, foreign income and a change in valuation allowances related to interest expense limitation deferred tax assets and other discrete items. The effective tax rate for the three months ended March 31, 2025 differs from the U.S. statutory rate primarily due to state taxes, foreign income and a change in valuation allowances related to interest expense limitation deferred tax assets. The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state and foreign jurisdictions. As of March 31, 2026, the Company is subject to U.S. federal income tax examinations for the years 2022 through 2024 and income tax examinations from various other jurisdictions for the years 2018 through 2024. Earnings from the Companys foreign subsidiaries are considered to be indefinitely reinvested. A distribution of these non-U.S. earnings in the form of dividends or otherwise would subject the company to foreign withholding taxes and may subject the Company to U.S. federal and state taxes. Determination of the amount of unrecognized deferred tax liability related t …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 14 Commitments and Contingencies The Company is a party to various legal proceedings that have arisen in the ordinary course of business. The Company records accruals for loss contingencies when losses are probable and reasonably estimable. The Company is not currently aware of any litigation matters or loss contingencies that would reasonably be expected to have a material adverse effect on our business, financial position, results of operations or cash flows. …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

Note 7 Leases The Company leases property used for warehousing, distribution centers, office space, branch locations, equipment and vehicles. The components of lease cost were as follows (in thousands): Three Months Ended March 31, Lease Type Classification 2026 2025 Operating lease expense (1) Operating expenses $ 7,323 $ 6,827 Financing lease amortization Operating expenses 138 150 Financing lease interest Interest expense 23 26 Financing lease expense 161 176 Sublease income (2) (193) (159) Net lease cost $ 7,291 $ 6,844 (1) Includes short-term lease expense, which is immaterial. (2) The Company subleases excess property to third-party tenants. Sub lease income is recognized on a straight-line basis over the sublease agreement and is recorded as an offset to operating lease expense. The value of net assets and liabilities related to our operating and finance leases as of March 31, 2026 and December 31, 2025 was as follows (in thousands): Lease Type March 31, 2026 December 31, 2025 Total right of use operating lease assets $ 108,938 $ 111,117 Total right of use financing lease assets 1,519 1,573 Total lease assets $ 110,457 $ 112,690 Total current operating lease obligation $ 20,329 $ 20,030 Total current financing lease obligation 584 594 Total current lease obligation $ 20,913 $ 20,624 Total long-term operating lease obligation $ 95,698 $ 98,022 Total long-term financing lease obligation 714 799 Total long-term lease obligation $ 96,412 $ 98,821 The value of lease liabili …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements - Adopted From time to time, the Financial Accounting Standards Board (the FASB) or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update (ASU). The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its consolidated financial condition, results of operations, cash flows or disclosures. In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets. The pronouncement is effective on a prospective basis for interim and annual reporting periods beginning after December 15, 2025, with early adoption permitted. The Company adopted this guidance on January 1, 2026. The adoption had no material impact on the Companys financial condition, results of operations or cash flows. Recent Accounting Pronouncements - Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income, which requires disclosure of disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements. The …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Note 15 Related Party Transactions Consulting Services Individuals employed by LKCM Headwater Operations, LLC, a related party of LKCM, have provided the Company with certain consulting services for interim executive management in addition to assisting in identifying cost savings, revenue enhancements and operational synergies of the combined companies. Expense of $0.2 million for both the three months ended March 31, 2026 and 2025 was recorded within Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), reflecting expenses incurred for these consulting services. Significant Shareholder LKCM, entities affiliated with LKCM and J. Bryan King (President and Chief Executive Officer of DSG and Chairman of the DSG Board of Directors), including private investment partnerships for which LKCM serves as investment manager, beneficially owned in the aggregate approximately 36.4 million shares of DSG common stock as of March 31, 2026 representing approximately 78.7% of the outstanding shares of DSG common stock as of March 31, 2026. Principal Executive Office Lease In connection with the Companys headquarters move to Fort Worth, Texas in 2023, the Company has been utilizing office space in a building that is leased by LKCM. The Company is not charged any rent or other amounts for the use of the office space. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Note 4 Revenue Recognition Disaggregation of Revenue The Companys revenue is primarily comprised of product sales to customers. The Company has disaggregated revenue by geographic area and by segment as it most reasonably depicts the amount, timing and uncertainty of revenue and cash flows generated from our contracts with customers. Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to): Three Months Ended March 31, (in thousands) 2026 2025 United States $ 366,236 $ 357,132 Canada 69,293 67,630 Europe 17,806 13,831 Pacific Rim 9,516 7,772 Latin America 31,233 28,637 Other 2,498 3,681 Intersegment revenue elimination (587) (654) Total revenue $ 495,995 $ 478,029 See Note 13 Segment Information for disaggregation of revenue by segment. Rental Revenue TestEquity rents new and used electronic test and measurement equipment to customers in multiple industries. Lawso n leases parts washer machines to customers. This leased equipment is included in Rental equipment, net in the Unaudited Condensed Consolidated Balance Sheets, and rental revenue is included in Revenue in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) . The unearned rental revenue related to customer prepayments on equipment leases was nominal at March 31, 2026 and December 31, 2025 . Rental revenue from operating leases: Three Months Ended March 31, (in thousands) 2026 2025 Revenue from operating leases $ 7,694 $ …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 13 Segment Information The Companys 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. The Company has four reporting segments: Lawson, TestEquity, Gexpro Services and Canada Branch Division. 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 is a distributor of industrial MRO supplies, safety products, fasteners, power tools and related value-add services to the Canadian MRO market t …

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Note 2 Summary of Significant Accounting Policies There were no significant changes to the Companys accounting policies from those disclosed in DSGs Annual Report on Form 10-K for the year ended December 31, 2025. See Note 2 of the 2025 consolidated financial statements included in DSGs Annual Report on Form 10-K for the year ended December 31, 2025 for further details of the Companys significant accounting policies. Recent Accounting Pronouncements - Adopted From time to time, the Financial Accounting Standards Board (the FASB) or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update (ASU). The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its consolidated financial condition, results of operations, cash flows or disclosures. In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets. The pronouncement is effective on a prospective basis for interim and annual reporting periods beginning after December 15, 2025, with early adoption permitted. The Company adopted this guidance on January 1, 2026. The adoption had …

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Note 10 Stockholders Equity Stock Repurchase Program Under an existing stock repurchase program authorized by the Board of Directors, the Company may repurchase its common stock from time to time in open market transactio ns, privately negotiated transactions or by other methods. During the first three months of 2026, no repurchases were made. During the first three months of 2025, the Company repurchased 320,638 shares of DSG common stock under the repurchase program at an average cost of $34.94 per share for a total cost of $11.2 million . T he remaining availability for stock repurchases under the program was $32.9 million at March 31, 2026. …

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