Distribution Solutions Group, Inc.

Previous wording

We manage and report our operating results through four reportable segments: Lawson, TestEquity, Gexpro Services and Canada Branch Division. In connection with the Source Atlantic Limited acquisition (as described in Note 3 – Business and Asset Acquisitions within Item 1. Financial Statements) during the third quarter of 2024, the Company realigned its reportable segments. Prior period segment results have been recast to reflect our new reportable segments. A summary of our reportable segments is presented below. For additional details about our segments and the segment realignment in the third quarter of 2024, see Note 1 – Nature of Operations and Basis of Presentation and Note 14 – Segment Information, within Item 1. Financial Statements.

Current wording

We manage and report our operating results through four reportable segments: Lawson, TestEquity, Gexpro Services and Canada Branch Division. A summary of our reportable segments is presented below. For additional details about our segments see Note 1 – Nature of Operations and Basis of Presentation and Note 14 – Segment Information, within Item 1. Financial Statements.

Previous wording

Canada Branch Division combines the operations of our Bolt Supply House (“Bolt”) and Source Atlantic Limited 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 37 branch locations.

Current wording

Canada Branch Division combines the operations of our Bolt Supply House (“Bolt”) and Source Atlantic Limited 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 36 branch locations.

Previous wording

DSG believes that the Purchasing Managers Index (“PMI”) published by the Institute for Supply Management is an indicative measure of the relative strength of the economic environment of the industry in which it operates. The PMI is a composite index of economic activity in the U.S. manufacturing sector. A measure of the PMI index above 50 is generally viewed as indicating an expansion of the manufacturing sector while a measure below 50 is generally viewed as representing a contraction. The average monthly PMI was 49.4 in the six months ended June 30, 2025, compared to 48.9 in thesix months ended June 30, 2024.

Current wording

DSG believes that the Purchasing Managers Index (“PMI”) published by the Institute for Supply Management is an indicative measure of the relative strength of the economic environment of the industry in which it operates. The PMI is a composite index of economic activity in the U.S. manufacturing sector. A measure of the PMI index above 50 is generally viewed as indicating an expansion of the manufacturing sector while a measure below 50 is generally viewed as representing a contraction. The average monthly PMI was 49.1 in the nine months ended September 30, 2025, compared to 48.3 in thenine months ended September 30, 2024.

Previous wording

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 37 branch locations. Source Atlantic was acquired to expand DSG’s operating footprint in the Canadian market.

Current wording

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 36 branch locations. Source Atlantic was acquired to expand DSG’s operating footprint in the Canadian market.

Previous wording

We continue to be affected byrising supplier costs caused by inflation and increased tariffs, transportation and labor costs. We have instituted various price increases during 2024 and 2025 in response to rising supplier costs including tariffs, as well as increased transportation and labor costs in order to manage our gross profit margins.

Current wording

We continue to be affected byrising supplier costs caused by inflation and increased tariffs, transportation and labor costs. We have instituted various price increases during 2024 and 2025 in response to rising supplier costs including tariffs, as well as increased transportation and labor costs in order to attempt to manage our gross profit margins.

Previous wording

The following table provides a reconciliation of Net income (loss) to Adjusted EBITDA on a consolidated basis and Operating income (loss) to Adjusted EBITDA by segment for thethree and six months ended June 30, 2025 and 2024. A reconciliation of Net income (loss) to Adjusted EBITDA by segment is not provided because management does not determine or review net income at the segment level and does not allocate non-operating costs and expenses to its segments, such as income taxes, interest expense, and various other non-operating income and expense.

Current wording

The following table provides a reconciliation of Net income (loss) to Adjusted EBITDA on a consolidated basis and Operating income (loss) to Adjusted EBITDA by segment for thethree and nine months ended September 30, 2025 and 2024. A reconciliation of Net income (loss) to Adjusted EBITDA by segment is not provided because management does not determine or review net income at the segment level and does not allocate non-operating costs and expenses to its segments, such as income taxes, interest expense, and various other non-operating income and expense.

Previous wording

Our consolidated revenue increased$62.9 million in the second quarter of 2025 compared to thesecond quarter of 2024 primarily driven by $48.8 million from acquisitions completed in 2024 and an increase in organic revenue of $14.1 million or 3.3%. Consolidated gross profit and Selling, general and administrative expenses also increased in thesecond quarter of 2025 compared to theprior year quarter, primarily driven by the inclusion of the S&S Automotive, Source Atlantic, TCR and ConRes TE acquisitions completed in 2024.

Current wording

Our consolidated revenue increased$49.9 million in the third quarter of 2025 compared to thethird quarter of 2024 primarily driven by $23.3 million from acquisitions completed in 2024 and an increase in organic revenue of $26.6 million or 6.0%. Consolidated gross profit and Selling, general and administrative expenses also increased in thethird quarter of 2025 compared to theprior year quarter, primarily driven by the inclusion of the S&S Automotive, Source Atlantic, TCR and ConRes TE acquisitions completed in 2024.

Previous wording

Gross profit increased $2.2 million, or 3.3%, to$68.6 million in the second quarter of 2025 compared to gross profit of $66.4 million in the prior year quarter primarily as a result of the inclusion of$3.0 million of additional gross profit from the acquisitions completed in 2024. This was partially offset by a decrease in gross profit on lower legacy Lawson revenue. Lawson gross profit as a percent of revenue was 55.2% in the second quarter of 2025 compared to 54.8% in the prior year quarter. The gross profit margin percentage increase was primarily due to lower amortization of the fair value step-up of inventory of $0.6 million related to the S&S Automotive Transaction and price increases partially offset by increased vendor costs.

Current wording

Gross profit increased $1.0 million, or 1.5%, to $66.3 million in the third quarter of 2025 compared to gross profit of $65.3 million in the prior year quarter primarily as a result of the increase in revenue. Lawson gross profit as a percent of revenue was 54.6% in the third quarter of 2025 compared to 55.4% in the prior year quarter. The gross profit margin percentage decrease was primarily due to increased vendor costs and higher tariff rates on inbound freight partially offset by lower amortization of the fair value step-up of inventory of $0.4 million related to the S&S Automotive Transaction and customer price increases.

Previous wording

During the three months ended June 30, 2025, Lawson generated Adjusted EBITDA of$15.7 million, a decrease of$0.8 million from the same period a year agoprimarily driven by contributions ofapproximately $1.5 million of additional Adjusted EBITDA generated by the acquisitions completed in 2024 offset bylower net margins on lower organic revenue.

Current wording

During the three months ended September 30, 2025, Lawson generated Adjusted EBITDA of$14.0 million, or 11.5%of sales. This isa decrease of$1.5 million from the same period a year agoprimarily driven by higher employee related costs and a lower gross profit margin percentage partially offset by increased revenue.

Previous wording

Gross profit decreased $3.2 million to $42.6 million in the second quarter of 2025 compared to gross profit of $45.8 million in the prior year quarter. The decrease was primarily driven by higher depreciation expense due to an expanded rental equipment fleet from the acquisition of ConRes TE. TestEquity gross profit as a percent of revenue decreased to 21.8% in thesecond quarter of 2025 compared to 23.2% in the prior year quarter primarily due to higher depreciation expense.

Current wording

Gross profit decreased $0.7 million to $43.6 million in the third quarter of 2025 compared to gross profit of $44.3 million in the prior year quarter. The decrease was primarily driven by $1.2 million of higher depreciation expense due to the expansion of the rental equipment fleet from the 2024 acquisition of ConRes TE. TestEquity gross profit as a percent of revenue decreased to 21.1% in thethird quarter of 2025 compared to 22.7% in the prior year quarter primarily due to higher depreciation expense on the expanded rental equipment fleet and a shift in sales toward test and measurement which have lower margins.

Previous wording

Selling, general and administrative expenses decreased $7.3 million to$37.8 million inthe second quarter of 2025 compared to $45.1 million in the prior year quarter. The decrease was primarily driven by lower severance and acquisition related retention expenses of $6.3 million, lower merger and acquisition expenses of$0.3 million and a higher gain on the sale of rental equipment of $0.4 million.

Current wording

Selling, general and administrative expenses increased $1.0 million to$41.0 million inthe third quarter of 2025 compared to $40.0 million in the prior year quarter. The increase was primarily driven by an increase in stock based compensation of $0.9 million, $0.6 million of higher bad debt expense and $0.6 million of higher employee related expenses, partially offset by lower severance and acquisition related retention expenses of $0.8 million, lower merger and acquisition expenses of $0.8 million and a higher gain on the sale of rental equipment of $0.4 million.

Previous wording

During the three months ended June 30, 2025, TestEquity generated Adjusted EBITDA of $13.5 million, a decrease of $2.0 million from the same period a year ago, which was primarily driven by a decrease in revenue and lower gross profit margins, partially offset by net margins of $1.6 million generated from 2024 acquisitions.

Current wording

During the three months ended September 30, 2025, TestEquity generated Adjusted EBITDA of $12.4 million or 6.0% of sales. This is a decrease of $2.0 million from the same period a year ago, which was primarily driven by lower gross profit margins, partially offset by net margins of $2.6 million generated from 2024 acquisitions.

Previous wording

Revenue increased $20.7 million, or 19.3%, to$127.8 millionin thesecond quarter of 2025 compared to $107.1 million in the second quarter of 2024. The increase in revenue was primarily driven by increased sales in the renewable energy, technology and aerospace and defense vertical markets of $9.8 million, $2.6 million and $6.1 million, respectively, and additional revenue generated from the 2024 acquisition of TCR of $1.2 million.

Current wording

Revenue increased $14.4 million, or 12.4%, to$130.5 millionin thethird quarter of 2025 compared to $116.1 million in the third quarter of 2024. The increase in revenue was primarily driven by increased sales in the renewable energy, aerospace and defense and industrial power vertical markets of $5.7 million, $4.4 million and $3.0 million, respectively, and additional revenue generated from the 2024 acquisition of TCR of$1.2 million.

Previous wording

Gross profit increased $6.8 million to $40.0 millionin thesecond quarter of 2025 compared to gross profit of$33.2 million in the prior year quarter, primarily on higher revenue. Gexpro Services gross profit as a percent of revenue increased to 31.3% in thesecond quarter of 2025 compared to 31.0% in the prior year quarter as a result of ashift in sales toward higher margin profile customers.

Current wording

Gross profit increased $4.3 million to $40.9 millionin thethird quarter of 2025 compared to gross profit of$36.6 million in the prior year quarter, primarily due to higher revenue. Gexpro Services gross profit as a percent of revenue decreased to 31.3% in thethird quarter of 2025 compared to 31.6% in the prior year quarter as a result of ashift in sales toward lower margin profile projects.

Previous wording

Selling, general, and administrative expenses increased $1.0 million to $26.1 million inthe second quarter of 2025 compared to $25.1 million in the prior year quarter primarily driven by investments to support the increase in Gexpro Services’ revenue.

Current wording

Selling, general, and administrative expenses increased $1.9 million to $27.0 million inthe third quarter of 2025 compared to $25.1 million in the prior year quarter primarily driven by investments to drive the increase in Gexpro Services’ revenue and increased expenses of $0.7 million driven by the 2024 acquisition of TCR.

Previous wording

During the three months ended June 30, 2025, Gexpro Services generated Adjusted EBITDA of $17.1 million, an increase of$4.3 million from the same period a year ago primarily driven by higher organic revenue, gross profit margin management and leveraging its Selling, general, and administrative expenses over a higher sales base.

Current wording

During the three months ended September 30, 2025, Gexpro Services generated Adjusted EBITDA of $17.8 million or 13.6% of sales. This isan increase of$1.4 million from the same period a year ago primarily driven by higher organic revenue, gross profit margin management and leveraging its Selling, general, and administrative expenses over a higher sales base.

Previous wording

Gross profit increased $12.8 million to $19.0 million in the second quarter of 2025 compared to gross profit of $6.2 million in the prior year quarter primarily from the inclusion ofgross profit of$12.6 million from the 2024 acquisition of Source Atlantic. Gross profit as a percent of revenue decreased to 33.9% in thesecond quarter of 2025 compared to 42.6% in the prior year quarter primarily due to the lower gross profit margin profile of Source Atlantic as compared to Bolt.

Current wording

Gross profit increased $6.9 million to $19.5 million in the third quarter of 2025 compared to gross profit of $12.6 million in the prior year quarter primarily from the inclusion of additional gross profit of$6.9 million from the 2024 acquisition of Source Atlantic. Gross profit as a percent of revenue increased to 32.5% in thethird quarter of 2025 compared to 32.1% in the prior year quarter primarily due to an increase in the gross profit margin profile of Source Atlantic as a result of executing on acquisition related synergy plans and lower inventory step up amortization of $0.7 million from the Source Atlantic acquisition.

Previous wording

During the three months ended June 30, 2025, Canada Branch Division generated Adjusted EBITDA of$3.6 million, an increase of $1.6 million from the same period a year ago, primarily driven by contributions of approximately$1.3 million generated by the 2024 acquisition of Source Atlantic.

Current wording

During the three months ended September 30, 2025, Canada Branch Division generated Adjusted EBITDA of$5.8 million, or 9.6%of sales. This isan increase of $1.8 million from the same period a year ago, primarily driven by approximately $1.8 million of adjusted EBITDA generated by the 2024 acquisition of Source Atlantic.

Previous wording

The $1.0 million expense in the first six months of 2025 related to the change in fair value of the earnout liabilities associated with the Frontier acquisition.

Current wording

The$0.9 million expense in the third quarter of 2024 related to the change in fair value of the earnout liabilities associated with the Frontier acquisition.

Previous wording

Other income (expense), net consists of effects of changes in foreign currency exchange rates, interest income, net and other non-operating income and expenditures. The $1.1 million change in the second quarter of 2025 compared to the same period of 2024 is primarily due to unfavorable changes in foreign currency exchange rates and a decrease in interest income.

Current wording

Other income (expense), net consists of effects of changes in foreign currency exchange rates, interest income, net and other non-operating income and expenditures. The $1.3 million change in the third quarter of 2025 compared to the same period of 2024 is primarily due to unfavorable changes in foreign currency exchange rates.

Previous wording

Income tax expense was $6.9 million, a 57.8% effective tax rate for the three months ended June 30, 2025 compared to an income tax benefit of $0.2 million and a (10.5)% effective tax rate for the three months ended June 30, 2024. The change in the year-over-year effective tax rate was primarily due to a change in valuation allowances related to interest expense limitation on deferred tax assets, state taxes and foreign income. The income tax expense recorded in the second quarter of 2025 is based on the estimated year-end effective tax rate.

Current wording

Income tax expense was $1.9 million, a 23.0% effective tax rate for the three months ended September 30, 2025 compared to an income tax benefit of $19.0 million and a (652.3)% effective tax rate for the three months ended September 30, 2024. The change in the year-over-year effective tax rate was primarily due to a change in valuation allowances related to interest expense limitation on deferred tax assets, state taxes and foreign income. The income tax expense recorded in the third quarter of 2025 is based on the estimated year-end effective tax rate. Limitations on the deductibility of interest expense and other permanent items on a nominal pre-tax income amount drove the higher effective tax rate in 2024.

Previous wording

Our consolidated revenue increased $124.8 million inthe firstsix months of 2025 compared to the firstsix months of 2024 primarily driven by an increase of $99.6 million from acquisitions completed in 2024 and an increase in organic revenue. Consolidated Gross profit and Selling, general and administrative expenses also increased over the prior year primarily driven by the inclusion of the ESS, S&S Automotive, Source Atlantic, TCR and ConRes TE acquisitions completed in 2024.

Current wording

Our consolidated revenue increased $174.8 million inthe first nine months of 2025 compared to the first nine months of 2024 primarily driven by an increase of $123.7 million from acquisitions completed in 2024 and an increase in organic revenue of 4.0%. Consolidated Gross profit and Selling, general and administrative expenses also increased over the prior year primarily driven by the inclusion of the ESS, S&S Automotive, Source Atlantic, TCR and ConRes TE acquisitions completed in 2024.

Previous wording

Revenue increased $5.5 million, or 2.3%, to$244.8 million in the firstsix months of 2025 compared to revenue of$239.3 million in the same period of 2024. The increase was primarily driven by $14.7 million of additional revenue generated from the acquisitions completed in 2024, partially offset by a decline in legacy Lawson revenue due to soft sales across the business of $9.2 million.

Current wording

Revenue increased $9.1 million, or 2.5%, to$366.3 million in the first nine months of 2025 compared to revenue of$357.3 million in the same period of 2024. The increase was primarily driven by $15.6 million of additional revenue generated from the acquisitions completed in 2024, partially offset by a decline in military customer sales of $5.4 million.

Previous wording

Gross profit increased $5.3 million to $136.8 million in the first six months of 2025 compared to gross profit of $131.5 million in the same period of 2024 primarily as a result of the inclusion of $7.4 million of additional gross profit from the acquisitions completed in 2024 partially offset by lower revenue for legacy Lawson. Lawson gross profit as a percent of revenue was 55.9% in the first six months of 2025 compared to 54.9% in the prior year period. The gross profit margin percentage increase was primarily the result of the lower amortization of the fair value step-up of inventory of $0.6 million related to the S&SAutomotive Transaction, lower write-offs of obsolete and excess inventory and increased prices, partially offset by increased vendor costs and lower gross profit margin profile on revenue generated by the 2024 acquisitions compared to Lawson’s organic profile.

Current wording

Gross profit increased $6.3 million to $203.1 million in the first nine months of 2025 compared to gross profit of $196.8 million in the same period of 2024 primarily as a result of the inclusion of $8.5 million of additional gross profit from the acquisitions completed in 2024 partially offset by lower revenue for legacy Lawson. Lawson gross profit as a percent of revenue was 55.5% in the first nine months of 2025 compared to 55.1% in the prior year period. The gross profit margin percentage increase was primarily the result of the lower amortization of the fair value step-up of inventory of $1.1 million related to the S&SAutomotive Transaction, lower write-offs of obsolete and excess inventory and increased prices. This was partially offset by increased vendor costs and higher tariff rates on inbound freight and lower gross profit margin profile on revenue generated by the 2024 acquisitions compared to Lawson’s organic profile.

Previous wording

During thesix months ended June 30, 2025, Lawson generated Adjusted EBITDA of $30.0 million, flat with the same period a year ago primarily driven by contributions of approximately $3.1 million generated by the acquisitions completed in 2024 offset by lower net margins on lower organic revenue.

Current wording

During thenine months ended September 30, 2025, Lawson generated Adjusted EBITDA of $44.0 million, a decrease of $1.4 million, or 3.1% from the same period a year ago primarily driven by lower net margins on lower organic revenue and higher selling, general and administrative expenses primarily from higher employee related costs, partially offset byadditional contributions of approximately $3.7 million generated by the acquisitions completed in 2024.

Previous wording

Gross profit decreased $3.7 million to$84.3 million in the firstsix months of 2025 compared to$88.0 million in the same period of 2024 primarily as a result of higher depreciation expense due to the expansion of the rental equipment fleet and the decrease in revenue. TestEquity gross profit as a percent of revenue decreased to 22.0% in the firstsix months of 2025 compared to 22.9% in the prior year primarily due to higher depreciation expense on the expanded rental equipment fleet of $2.3 million and higher inventory write-offs of $1.3 million.

Current wording

Gross profit decreased $4.3 million to$127.9 million in the first nine months of 2025 compared to$132.3 million in the same period of 2024. The decrease was primarily driven by $3.2 million of higher depreciation expense due to the expansion of the rental equipment fleet from the 2024 acquisition of ConRes TE and a sales mix shift toward test and measurement which have lower margins. TestEquity gross profit as a percent of revenue decreased to 21.7% in the first nine months of 2025 compared to 22.8% in the prior year primarily due to higher depreciation expense on the expanded rental equipment fleet, higher inventory write-offs of $1.6 million and a shift in sales mixtoward test and measurement which have lower margins partially offset by favorability in vendor rebates.

Previous wording

During thesix months ended June 30, 2025, TestEquity generated Adjusted EBITDA of$26.3 million, a decrease of$0.8 million, or 2.8% from the same period a year ago primarily driven by lower organic sales and gross margins partially offset by net margins generated from the 2024 acquisition of ConRes TE.

Current wording

During thenine months ended September 30, 2025, TestEquity generated Adjusted EBITDA of$38.6 million, a decrease of$2.8 million, or 6.8%, from the same period a year ago primarily driven by lower gross margins partially offset by net margins of$6.3 million generated from the 2024 acquisition of ConRes TE.

Previous wording

Revenue increased $40.9 million, or 19.9%, to$246.7 million in the firstsix months of 2025 compared to$205.8 million in the same period of 2024. The increase in revenue was primarily driven by increased sales in the renewable energy, aerospace and defense and technology vertical markets of $24.5 million, $10.2 million and $6.6 million, respectively, and additional revenue generated from the 2024 acquisition of TCR. This was partially offset by softness within the industrial power vertical market.

Current wording

Revenue increased $55.3 million, or 17.2%, to$377.2 million in the first nine months of 2025 compared to$321.9 million in the same period of 2024. The increase in revenue was primarily driven by increased sales in the renewable energy, aerospace and defense and technology vertical markets of $30.2 million, $14.6 million, and $7.9 million, respectively, and additional revenue generated from the 2024 acquisition of TCR of $3.4 million. This was partially offset by softness within the consumer and industrial vertical market.

Previous wording

Gross profit increased $13.1 million to$77.1 million in the firstsix months of 2025 compared to$63.9 million inthe same period of 2024 primarily due to an increase in revenue. Gexpro Services’ gross profit as a percent of revenue was 31.2% in the firstsix months of 2025 compared to 31.1% in the prior year period.

Current wording

Gross profit increased $17.4 million to$118.0 million in the first nine months of 2025 compared to$100.6 million inthe same period of 2024 primarily due to higher revenue. Gexpro Services’ gross profit as a percent of revenue was 31.3% in the first nine months of 2025 compared to 31.2% in the prior year period.

Previous wording

Selling, general, and administrative expenses increased $1.5 million to$51.9 million in the firstsix months of 2025 compared to$50.4 million in the same period of 2024. The increase was primarily driven by investments to support sales growth and 2025 new commercial investments, partially offset by lower merger and acquisition expenses of$0.6 million and a reduction to non-recurring strategic project consulting costs of $1.6 million.

Current wording

Selling, general, and administrative expenses increased $3.5 million to$79.0 million in the first nine months of 2025 compared to$75.5 million in the same period of 2024. The increase was primarily driven by investments to support sales growth and 2025 new commercial investments, partially offset by lower merger and acquisition expenses of$1.1 million and a reduction to non-recurring strategic project consulting costs of $2.2 million.

Previous wording

During thesix months ended June 30, 2025, Gexpro Services generated Adjusted EBITDA of$32.1 million, an increase of $8.5 million, or 36.1% from the same period a year agoprimarily driven byhigher organic revenue, managing gross profit margins and leveraging Selling, general, and administrative expenses over a higher sales base.

Current wording

During thenine months ended September 30, 2025, Gexpro Services generated Adjusted EBITDA of$49.8 million, an increase of $9.9 million, or 24.7% from the same period a year agoprimarily driven byhigher organic revenue, managing gross profit margins and leveraging Selling, general, and administrative expenses over a higher sales base.

Previous wording

Revenue increased $79.4 million, or 294.6%, to$106.4 million in the firstsix months of 2025 compared to$27.0 million the same period of 2024 primarily driven by$78.7 million of revenue generated by the 2024 acquisition of Source Atlantic.

Current wording

Revenue increased $100.3 million, or 151.9%, to$166.4 million in the first nine months of 2025 compared to$66.1 million the same period of 2024 primarily driven by$98.8 million of revenue generated by the 2024 acquisition of Source Atlantic.

Previous wording

Gross profit increased $24.3 million to $35.9 million in thefirstsix months of 2025 compared to gross profit of $11.6 million in the same period of 2024 primarily from the inclusion of gross profitof$23.8 million generated by the 2024 acquisitionof Source Atlantic. Gross profit as a percent of revenue decreased to 33.7% in the firstsix months of 2025 compared to 42.9% in the prior year primarilydue to the lower gross profit margin profile of Source Atlantic as compared to Bolt.

Current wording

Gross profit increased $31.2 million to $55.4 million in thefirst nine months of 2025 compared to gross profit of $24.1 million in the same period of 2024 primarily from the inclusion of additional gross profitof$30.8 million generated by the 2024 acquisitionof Source Atlantic. Gross profit as a percent of revenue decreased to 33.3% in the first nine months of 2025 compared to 36.5% in the prior year primarilydue to the lower gross profit margin profile of Source Atlantic as compared to Bolt.

Previous wording

During the firstsix months of 2025, Canada Branch Division generated Adjusted EBITDA of$6.2 million, an increase of $2.8 million from the same period a year ago with an increase of approximately $2.1 million driven by the acquisition of Source Atlantic.

Current wording

During the first nine months of 2025, Canada Branch Division generated Adjusted EBITDA of$12.0 million, an increase of $4.6 million from the same period a year ago with an increase of approximately $4.0 million driven by the acquisition of Source Atlantic.

Previous wording

Interest expense increased $3.8 million in thefirst six months of 2025 compared to the same period of 2024 primarily due to higher outstanding borrowings related to the 2024 acquisitions of S&S Automotive, Source Atlantic, TCR and ConRes TE.

Current wording

Interest expense increased $2.6 million in thefirst nine months of 2025 compared to the same period of 2024 primarily due to higher outstanding borrowings related to the 2024 acquisitions of S&S Automotive, Source Atlantic, TCR and ConRes TE.

Previous wording

Other income (expense), net consists of effects of changes in foreign currency exchange rates, interest income, net and other non-operating income and expenditures. Other income (expense), net was flatin thefirst six months of 2025 compared to the same period of 2024 .

Current wording

Other income (expense), net consists of effects of changes in foreign currency exchange rates, interest income, net and other non-operating income and expenditures. The $1.5 million change in the first nine months of 2025 compared to the same period of 2024 is primarily due to unfavorable changes in foreign currency exchange rates and lower interest income.

Previous wording

Income tax expense was $9.1 million, a 52.4% effective tax rate for the first six months of 2025 compared to an income tax benefit of $4.3 million and a 56.1% effective tax rate for the first six months of 2024. The small change in the year-over-year effective tax rate was primarily due to changes in valuation allowances related to interest expense limitation on deferred tax assets.

Current wording

Income tax expense was $11.0 million, a 42.9% effective tax rate for the first nine months of 2025 compared to an income tax benefit of $23.3 million and a 498.1% effective tax rate for the first nine months of 2024. The change in the year-over-year effective tax rate was primarily due to changes in valuation allowances related to interest expense limitation on deferred tax assets. Limitations on the deductibility of interest expense and other permanent items on a nominal pre-tax income amount drove the higher effective tax rate in 2024.

Previous wording

Cash and cash equivalents were $47.4 million on June 30, 2025 compared to $66.5 million on December 31, 2024.

Current wording

Cash and cash equivalents were $69.2 million on September 30, 2025 compared to $66.5 million on December 31, 2024.

Previous wording

The Company believes its current balances of cash and cash equivalents, availability under its Amended Credit Agreement and cash flows from operations will be sufficient to meet its liquidity needs for the next twelve months. As of June 30, 2025, the Company had $47.4 million of cash and cash equivalents and $252.7 million of borrowing availability remaining, net of outstanding letters of credit, under the Amended Credit Agreement.

Current wording

The Company believes its current balances of cash and cash equivalents, availability under its Amended Credit Agreement and cash flows from operations will be sufficient to meet its liquidity needs for the next twelve months. As of September 30, 2025, the Company had $69.2 million of cash and cash equivalents and $252.7 million of borrowing availability remaining, net of outstanding letters of credit, under the Amended Credit Agreement.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $28.5 million primarily due to net income including non-cash items partially offset by investments in trade working capital and other net cash flow items.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2025 was $66.9 million primarily due to net income including non-cash items, partially offset by investments in trade working capital and other net cash flow items.