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United States securities and exchange commission logo
November 3, 2023
Ron Knutson
Chief Financial Officer
Distribution Solutions Group, Inc.
8770 W. Bryn Mawr Avenue
Suite 900
Chicago, IL 60631
Re: Distribution
Solutions Group, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2022
File No. 000-10546
Dear Ron Knutson:
We have reviewed your
filing and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2022
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Non-GAAP Adjusted EBITDA, page 27
1. We note you reconcile
Adjusted EBITDA to operating income. Please tell us your
consideration of
Question 103.02 of the Staff's Compliance and Disclosure Interpretations
on Non-GAAP Financial
Measures in determining operating income to be the most
directly comparable
GAAP financial measure.
2. You present Adjusted
EBITDA by reportable segment which is a non-GAAP
measure. The inclusion
of these non-GAAP measures requires a reconciliation to the most
directly comparable
GAAP measure. Please revise accordingly or tell us how your
presentation complies
with Item 10(e) of Regulation S-K. You may also find Question
104.03 of the Staff's
Compliance and Disclosure Interpretations on Non-GAAP Measures
helpful.
Ron Knutson
FirstName
DistributionLastNameRon Knutson
Solutions Group, Inc.
Comapany 3,
November NameDistribution
2023 Solutions Group, Inc.
November
Page 2 3, 2023 Page 2
FirstName LastName
Supplemental Information - Lawson Non-GAAP Adjusted Operating Income and
Non-GAAP
Adjusted EBITDA
Lawson Non-GAAP Adjusted Operating Income, page 28
3. We note you present the operating results of Lawson on a GAAP and
non-GAAP basis. It
appears you present financial information that combines post-merger
results and
unadjusted pre-merger results. Please explain how your presentation of
combined results
without reflecting all relevant and significant pro forma adjustments
required by Article
11 of Regulation S-X is appropriate or revise.
Lawson Segment, page 31
4. Where you describe two or more business reasons that contributed to a
material change in
a financial statement line item between periods, please quantify,
where possible, the extent
to which each change contributed to the overall change in that line
item. As examples, we
note your disclosure that the increase in revenue was driven by price
increases, increased
quantity volumes and strengthening sales. The increase in selling,
general and
administrative expenses was driven by compensation expense, higher
severance, and
higher amortization expense, partially offset by lower costs related
to the Mergers and
stock-based compensation. In each case the disclosures do not quantify
any of the factors.
See Item 303 of Regulation S-K and SEC Release No. 34-48960.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Please contact Scott Stringer at 202-551-3272 or Adam Phippen at
202-551-3336 if you
have questions regarding comments on the financial statements and related
matters.
Sincerely,
Division of
Corporation Finance
Office of Trade
& Services
cc: Rick Pufpaf