6 unchanged sentences
If our inventory forecasting and production planning processes result in inventory levels exceeding the levels demanded by customers or should our customers decrease their orders with us, our operating results could be adversely affected due to costs of carrying the inventory and additional inventory write-downs for excess and obsolete inventory.
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Work stoppages and other disruptions at transportation centers or shipping ports, along with other supply chain disruptions, may adversely affect our ability to obtain inventory and make deliveries to our customers.
6 unchanged sentences
Any disruptions in that particular supplier’s business, operations or financial condition, or TestEquity’s relationship with this significant supplier, could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Changes in our customers, product mix and pricing strategy could cause our gross margin percentage to decline in the future.
+Added: Changes in our customers, product mix and pricing strategy could cause our gross profit margin percentage to decline in the future.
From time to time, our businesses have experienced overall changes in the product mix demand of customers.
1 unchanged sentence
Changes in our customers, product mix, volume of orders or prices charged, along with additional freight costs or lower productivity levels, could cause our gross profit margin percentage to decline.
−Removed: Our gross margin percentage may also come under pressure in the future if we increase the percentage of national accounts in our customer base, as sales to these customers are generally at lower margins.
+Added: Our gross profit margin percentage may also come under pressure in the future if we increase the percentage of national accounts in our customer base, as sales to these customers are generally at lower margins.
Disruptions of our information and communication systems could adversely affect the Company.
5 unchanged sentences
During the normal course of business we receive, retain and transmit certain confidential information that our customers provide to purchase products or services or to otherwise communicate with us, as well as certain information about our employees.
−Removed: Our technologies, systems and networks (and those of our business partners) have been and may in the future be the target of cyber attacks and/or information security incidents that may have resulted in, or may in the future result in, the unauthorized release, misuse, loss or destruction of proprietary, personal and other information, or other disruption of our business operations.
+Added: Our technologies, systems and networks (and those of our business partners) have been and may in the future be the target of cyber attacks and/or information security incidents that may have resulted in, or may in the future result in, the unauthorized release, misuse, loss or destruction of proprietary, personal and other information, or other disruption of our business operations, including compromise of our email systems.
For example, in February 2022, DSG became aware that its computer network was the subject of a cyber incident potentially involving unlawful access.
2 unchanged sentences
As cyber threats continue to evolve, we may be required to
−Removed: Ta ble of Contents
expend additional resources to continue to modify or enhance our protective measures or to investigate and fix any information security vulnerabilities.
28 unchanged sentences
Debt Financing Risks
−Removed: Ta ble of Contents
We have a significant amount of indebtedness, and our significant indebtedness could adversely affect our business, financial condition and results of operations.
25 unchanged sentences
Should funding be insufficient at any time in the future, we may be unable to develop or enhance our products or services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Prolonged periods of inflation could require government efforts to combat inflation which could lead to higher financing costs.
−Removed: Ta ble of Contents
−Removed: Inflation has risen on a global basis and the United States has recently experienced historically high levels of inflation.
−Removed: If the inflation rate continues to increase, government efforts may be required to combat inflation such as raising the interest rate benchmark which could lead to higher financing costs and have material adverse effect on our business, financial condition and results of operations.
+Added: Government efforts to combat inflation, along with other interest rate pressures arising from an inflationary economic environment, could lead to higher financing costs.
+Added: Inflation has risen on a global basis, the United States has been experiencing historically high levels of inflation, and government entities have taken various actions to combat inflation, such as raising interest rate benchmarks.
+Added: Government entities may continue their efforts, or implement additional efforts, to combat inflation, which could include among other things continuing to raise interest rate benchmarks and/or maintaining interest rate benchmarks at elevated levels.
+Added: Such government efforts, along with other interest rate pressures arising from an inflationary economic environment, could lead to higher financing costs and have material adverse effect on our business, financial condition and results of operations.
Common Stock Risks
4 unchanged sentences
Based on a Schedule 13D filed with the SEC by LKCM, J.
−Removed: Bryan King and various other persons and entities (as amended through June 17, 2022), entities affiliated with Luther King Capital Management Corporation ("LKCM") beneficially owned in the aggregate approximately 14.6 million shares of DSG common stock as of June 15, 2022, representing approximately 75% of the outstanding shares of DSG common stock as of June 30, 2022.
+Added: Bryan King and various other persons and entities (as amended through June 17, 2022), entities affiliated with Luther King Capital Management Corporation ("LKCM") beneficially owned in the aggregate approximately 14.6 million shares of DSG common stock as of June 15, 2022, representing approximately 75% of the outstanding shares of DSG common stock as of September 30, 2022.
Bryan King, Chairman and Chief Executive Officer of the Company, is a Principal of LKCM.
13 unchanged sentences
The Company concluded that further remediation was required, and accordingly, has made an accrual for the estimated cost of this environmental matter.
−Removed: A remediation plan was approved by the Alabama Department of Environmental Management and the remediation of the affected area is ongoing.
+Added: remediation plan was approved by the Alabama Department of Environmental Management and the remediation of the affected area is ongoing.
Additional procedures may be required that could negatively impact our business, financial condition and results of operations.
−Removed: Ta ble of Contents
Our results of operations could be affected by changes in taxation.
22 unchanged sentences
We issued an aggregate of 10.3 million shares of DSG common stock on April 1, 2022 in connection with the closing of the Mergers.
−Removed: In addition, we could be obligated to issue up to an aggregate of 1.7 million additional shares of DSG common stock in accordance with the earnout provisions of the Merger Agreements.
−Removed: As of June 30, 2022, approximately 1,238,000 additional shares of DSG common stock are expected to be issued to entities affiliated with LKCM in accordance with and subject to certain terms and conditions of the first earnout provision of the Merger Agreements.
−Removed: The remaining 462,000 additional shares of DSG common stock would be available to be issued to entities affiliated with LKCM or forfeited in in
−Removed: Ta ble of Contents
−Removed: accordance with and subject to certain terms and conditions of the second earnout provision of the Merger Agreements.
+Added: In addition, we could be obligated to issue up to an aggregate of 1.7 million additional shares of DSG common
+Added: stock in accordance with the earnout provisions of the Merger Agreements.
+Added: As of September 30, 2022 , approximately 1,238,000 additional shares of DSG common stock are expected to be issued to entities affiliated with LKCM in accordance with and subject to certain terms and conditions of the first earnout provision of the Merger Agreements.
+Added: The remaining 462,000 additional shares of DS G common stock would be available to be issued to entities affiliated with LKCM or forfeited in in accordance with and subject to certain terms and conditions of the second earnout provision of the Merger Agreements.
The issuance of such a significant number of shares of DSG common stock could have a negative effect on the market price of DSG common stock.
22 unchanged sentences
Additional unanticipated costs may be incurred in the combination process.
−Removed: DSG’s estimates and judgments related to the acquisition accounting models used to record the purchase price allocation in connection with the Mergers may be inaccurate.
−Removed: DSG’s management has made and expects to continue to make significant accounting judgments and estimates for the application of acquisition accounting under GAAP and the underlying valuation models in connection with the Mergers.
−Removed: Our business, financial condition and results of operations could be materially and adversely impacted in future periods if our accounting judgments and estimates related to these models prove to be inaccurate.
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We may be required to recognize impairment charges for goodwill and other intangible assets.
As a result of the closing of the Mergers on April 1, 2022 , we have an amount of goodwill and other intangible assets on our balance sheet that is significantly greater than the amount of goodwill and other intangible assets on our December 31, 2021 consolidated balance sheet.
−Removed: In ac cordance with GAAP, our management periodically assesses our goodwill and other intangible assets to determine if they are impaired.
+Added: In ac cordance with GAAP, our management periodically assesses our goodwill and other intangible
+Added: assets to determine if they are impaired.
Significant negative industry or economic trends, disruptions to our business, an inability to effectively integrate acquired businesses, unexpected significant changes, planned changes in use of the assets, divestitures and market capitalization declines may impair goodwill and other intangible assets.
11 unchanged sentences
Litigation relating to the Mergers could result in the payment of damages following the closing of the Mergers.
−Removed: DSG and members of the DSG board of directors are and may in the future be parties, among others, to litigation related to the Merger Agreements and the Mergers.
−Removed: Among other remedies, the stockholders in the pending litigation seek, and other stockholders could seek, damages.
+Added: DSG and members of the DSG board of directors currently are, and may in the future be, parties, among others, to litigation related to the Merger Agreements and the Mergers.
+Added: Among other remedies, the stockholders in the pending litigation seek, and other stockholders could seek, monetary damages.
The outcome of any legal proceedings are difficult to predict and any such lawsuits could result in substantial costs to us.
9 unchanged sentences
The cost of implementing this type of financial organization, reporting and controls in respect of TestEquity and Gexpro Services and integrating their financial reporting processes with our financial reporting processes may be significant.
−Removed: If there are limitations in TestEquity’s or Gexpro Services’ financial organization, reporting and controls, or if we are unable to effectively integrate their financial reporting processes with our financial reporting processes, we could have, among other things, material weaknesses in our internal controls, violate our indebtedness covenants, miss an SEC reporting deadline or otherwise not comply with an applicable law or regulation.
−Removed: Ta ble of Contents
+Added: If there are limitations in TestEquity’s or Gexpro Services’ financial organization, reporting and controls, or if we are unable to effectively integrate their financial reporting processes with our financial reporting processes, we could have, among other things, material weaknesses in our internal controls, violate our indebtedness covenants, miss an SEC reporting deadline or otherwise fail to comply with an applicable law or regulation.
General Risks
1 unchanged sentence
Any decline or uncertainty in the strength of the economy may lead to a decrease in customer spending and may cause certain customers to cancel or delay placing orders.
−Removed: Some of our customers may file for bankruptcy protection, preventing us from collecting on accounts receivable and may result in our stocking excess inventory.
+Added: Some of our customers may file for bankruptcy protection, preventing us
+Added: from collecting on accounts receivable and may result in our stocking excess inventory.
Contractions in the credit markets may also cause some of our customers to experience difficulties in obtaining financing, leading to lower sales, delays in the collection of receivables and result in an increase in bad debt expense.
Adverse economic conditions could also affect our key suppliers and contractors.
−Removed: This could lead to us incurring additional expenses or result in delays in shipping products to our customers.
+Added: This could lead us to incur additional expenses or result in delays in shipping products to our customers.
Economic uncertainty can make it difficult to accurately predict future order activity and affect our ability to effectively manage inventory levels.
23 unchanged sentences
Any borrowings in Canadian dollars or any other foreign currency would expose us to market risk relating to the change in the value of such foreign currency in relation to the U.S.
−Removed: Ta ble of Contents
−Removed: Agreement and Plan of Merger, dated as of December 29, 2021, by and among LKCM TE Investors, LLC, TestEquity Acquisition, LLC, Lawson Products, Inc.
−Removed: and Tide Sub, LLC, incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed January 4, 2022.
−Removed: Agreement and Plan of Merger, dated as of December 29, 2021, by and among 301 HW Opus Investors, LLC, 301 HW Opus Holdings, Inc., Lawson Products, Inc.
−Removed: and Gulf Sub, Inc., incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed January 4, 2022.
−Removed: Amended and Restated Certificate of Incorporation of the Company, as amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company effective as of May 5, 2022.
−Removed: Amended and Restated By-Laws of the Company effective as of May 5, 2022, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No.
−Removed: 000-10546) filed May 5, 2022.
−Removed: Lawson Products, Inc.
−Removed: Executive Deferral Plan (as Amended and Restated Effective November 1, 2015), incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 000-10546) for the quarter ended September 30, 2021.
−Removed: Lawson Products, Inc.
−Removed: Amended Stock Performance Plan (as Amended and Restated Effective January 24, 2017), incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 000-10546) for the quarter ended September 30, 2021.
−Removed: Amendment of the Lawson Products, Inc.
−Removed: Amended Stock Performance Plan (as Amended and Restated Effective January 24, 2017), dated December 23, 2020, incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K (File No.
−Removed: 000-10546) for the fiscal year ended December 31, 2020.
−Removed: Form Letter regarding Stock Performance Rights, incorporated by reference to Exhibit 10(c)(16) to the Company's Annual Report on Form 10-K (File No.
−Removed: 000-10546) for the fiscal year ended December 31, 2004.
−Removed: Lawson Products, Inc.
−Removed: 2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019), incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed May 3, 2019.
−Removed: First Amendment to the Lawson Products, Inc.
−Removed: 2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019), incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed May 3, 2019.
−Removed: Amendment to the Lawson Products, Inc.
−Removed: 2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019), dated December 23, 2020, incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K (File No.
−Removed: 000-10546) for the fiscal year ended December 31, 2020.
−Removed: Form of Award Agreement under the 2009 Equity Compensation Plan (Target Units, SPRs and Restricted Units), incorporated by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 000-10546) for the quarter ended September 30, 2021.
−Removed: Form of Award Agreement under the 2009 Equity Compensation Plan (MSU Target Units, ROIC Target Units and Restricted Units), incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 000-10546) for the quarter ended September 30, 2021.
−Removed: Form of Award Agreement under the 2009 Equity Compensation Plan (MSU Target Units, ROIC Target Units and Restricted Units), incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 000-10546) for the quarter ended September 30, 2021.
−Removed: Lawson Products, Inc.
−Removed: 2021 Annual Incentive Plan Summary, incorporated by reference to Exhibit 10.14 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 000-10546) for the quarter ended September 30, 2021.
−Removed: Form of Indemnification Agreement for Directors and Officers, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed September 19, 2008.
−Removed: Form of Change in Control Agreement for Officers, incorporated by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 000-10546) for the quarter ended September 30, 2021.
−Removed: Employment Agreement dated as of August 14, 2017 by and between Lawson Products, Inc., an Illinois corporation, and Michael G.
−Removed: DeCata, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed August 17, 2017.
−Removed: Amendment No.1 to the Employment Agreement entered into on April 11, 2018 between Lawson Products, Inc., an Illinois corporation, and Michael G.
−Removed: DeCata, incorporated herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed April 11, 2018.
−Removed: Ta ble of Contents
−Removed: Employment Agreement dated as of August 29, 2012 by and between Lawson Products, Inc., an Illinois corporation, and Ron Knutson, incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed September 4, 2012.
−Removed: Retirement and Consulting Agreement, dated as of March 2, 2021, by and between Lawson Products, Inc., an Illinois corporation, and Neil Jenkins, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed March 5, 2021.
−Removed: Voting Agreement, dated as of December 29, 2021, by and among Lawson Products , Inc.
−Removed: and Luther King Capital Management Corporation, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
−Removed: 000-10546) filed January 4, 2022.
−Removed: Amended and Restated Credit Agreement, dated as of April 1, 2022, by and among Lawson Products, Inc., the subsidiaries of Lawson Products, Inc.
−Removed: party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent , incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No.
−Removed: 000-10546) filed April 4, 2022 .
−Removed: Registration Rights Agreement, dated as of April 1, 2022, by and among Lawson Products, Inc., 301 HW Opus Investors, LLC and LKCM TE Investors, LLC, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.
−Removed: 000-10546) filed April 4, 2022 .
−Removed: Retirement and Consulting Agreement, dated as of April 4, 2022, by and between Lawson Products, Inc., an Illinois corporation, and Michael G.
−Removed: DeCata, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.
−Removed: 000-10546) filed April 8, 2022 .
−Removed: Employment Agreement, dated as of April 4, 2022, by and between Lawson Products, Inc., an Illinois corporation, and Cesar A.
−Removed: Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
−Removed: Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
−Removed: Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
−Removed: Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
−Removed: 101 The following financial statements from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in Inline XBRL:
−Removed: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statement of Operations and Comprehensive (Loss) Income, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
−Removed: 101.INS XBRL Instance Document
−Removed: 101.SCH** XBRL Taxonomy Extension Schema Document
−Removed: 101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document
−Removed: 101.DEF** XBRL Taxonomy Extension Definition Linkbase Document
−Removed: 101.LAB** XBRL Taxonomy Extension Label Linkbase Document
−Removed: 101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document
−Removed: 104 The cover page from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in Inline XBRL
−Removed: † Certain schedules and/or similar attachments omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the U.S.
−Removed: Securities and Exchange Commission.
−Removed: The Company agrees to furnish supplementally a copy of any omitted schedule or similar attachment to the SEC upon request.
−Removed: * Indicates management employment contracts or compensatory plans or arrangements.
−Removed: ** Filed herewith.
−Removed: *** Furnished herewith.
−Removed: Ta ble of Contents
−Removed: Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
−Removed: DISTRIBUTION SOLUTIONS GROUP, INC.
−Removed: August 9, 2022 /s/ J.
−Removed: Chairman and Chief Executive Officer
−Removed: (principal executive officer)
−Removed: August 9, 2022 /s/ Ronald J.
−Removed: Executive Vice President and Chief Financial Officer
−Removed: (principal financial officer)
−Removed: August 9, 2022 /s/ David S.
−Removed: Vice President, Controller and Chief Accounting Officer
−Removed: (principal accounting officer)
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.