Distribution Solutions Group, Inc. (DSGR) shares plummeted 5.14% on Thursday after the company reported a 2.1% decline in organic sales for the third quarter of 2024, despite achieving record quarterly sales of $468 million, up 6.6% year-over-year. The organic sales decline, coupled with challenges in the federal government sector and weak electronics manufacturing, weighed heavily on the company's stock performance.

Among the negative points highlighted in the earnings report, Distribution Solutions Group faced a lackluster industrial backdrop, with weak electronics manufacturing impacting certain verticals. Additionally, the company experienced choppiness in demand across certain end markets, affecting its overall performance. Furthermore, the company's leverage increased to 3.7 times due to recent acquisitions, which may impact its financial flexibility.

However, the company also reported some positive points, including significant progress in integrating acquisitions and capturing more cost savings than anticipated. Distribution Solutions Group announced three strategic acquisitions, enhancing its geographic footprint and service offerings. The company's adjusted EBITDA improved to $49.1 million, up 12.4% over the prior year, indicating better operating leverage.