Good morning, and welcome to the MSC Industrial Supply Q4 and Full Year 2016 Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Vice President of Investor Relations and Treasurer, John Chironna. Please go ahead, sir.

Thank you, and good morning, everyone. I'd like to welcome you to our fiscal 2016 fourth quarter and full year conference call. In the room with me are Chief Executive Officer, Erik Gershwind; and our Chief Financial Officer, Rustom Jilla. During today's call, we will refer to various financial and management data in the presentation slides that accompany our comments as well as our operational statistics, both of which can be found on the Investor Relations section of our website. Let me reference our Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. Our comments on this call as well as the supplemental information we are providing on the website contain forward-looking statements within the meaning of the U.S. securities laws including guidance about expected future results, expectations regarding our ability to gain market share and expected benefits from our investment and strategic plans. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these statements. Information about these risks is noted in our earnings press release and the risk factors in the MD&A sections of our latest Annual Report on Form 10-K filed with the SEC as well as in our other SEC filings. These forward-looking statements are based on our current expectations and the company assumes no obligation to update these statements. Investors are cautioned not to place undue reliance on these forward-looking statements. In addition, during the course of this call, we may refer to certain adjusted financial results which are non-GAAP measures. Please refer to the table attached to the press release and the GAAP versus non-GAAP reconciliations in our presentation, which contain the reconciliation of the adjusted financial measures to the most directly comparable GAAP measures. I'll now turn the call over to Erik.

Thank you, John. Good morning, everyone, and thanks for joining us today. I'll begin by covering what continues to be a very difficult environment. I'll then discuss our recent business developments which are highlighted by solid share gains, stable gross margins, the ongoing benefits of strong expense control, and earnings per share above the top end of our fourth quarter guidance range. Rustom will provide the details on our financial results, share our first quarter 2017 guidance, and then discuss our fiscal 2017 annual operating margin framework. I'll conclude with some additional comments on our expectations for the coming year and then reinforce the opportunity that we see moving forward. We'll then open up the line for questions. So, let me begin with market conditions and our performance against the challenging backdrop. Conditions remain very difficult throughout the quarter, much as they have for the past few quarters. Low oil prices and the strong U.S. dollar continue to weigh on manufacturing activity. While we did not see the more extensive summer plant shutdowns that some of our customers were talking about back in late June, demand levels remains depressed particularly in metalworking and heavy manufacturing. As you may have noticed, MBI readings have ticked up over the past two months posting over 48 for both August and September. While these levels still denote contraction in metalworking end markets, the readings are nonetheless a significant improvement over the trends of the past year. If they sustain, it would bode well for our future prospects and indicate a potential leveling in the metalworking industry. That said, for now we remain cautious. Keep in mind that the rolling 12-month average which on a four-month lag is most highly correlated with our sales is only reading 45.7. And that reading is indicative of significant…

Thank you, Erik. Good morning, everyone. Let's turn to our fiscal fourth quarter in greater detail. Our sales growth for the quarter was 2.4% over last year; however, there were four extra sales days in this year's fourth quarter, so the relevant comparison is really average daily sales. These though better than guidance declined 3.6% versus last year's Q4. So, we returned to the usual 52-week year for fiscal 2017 and I'll cover that when discussing our guidance and annual operating margin framework. With regards to gross margin, we posted 44.8% for the quarter, just 10 basis points below the midpoint of our guidance and 20 basis points lower than the fourth quarter last year. The year-over-year reduction reflects the impact of ongoing headwinds from customer mix as well as a soft pricing environment offset to quite an extent by our gross margin counter measures. We continued to tightly manage operating expenses. Q4 sales were approximately $9 million above the midpoint of guidance and after allowing for the increase in variable costs associated with this, our OpEx too came in slightly below the guidance midpoints. Year upon year, OpEx as reported appears higher, but that's only due to the extra week of payroll costs, et cetera. On a comparable basis, our OpEx was significantly lower versus fiscal 2015's fourth quarter. Part of our year-over-year OpEx decline is due to lower variable expenses related to lower average daily sales, but even without this, we continued our pattern of expense reductions versus prior-year with associate compensation, advertising, auto, T&E, the main drivers. Note that our initiatives are not just about cost reduction. For example, we have given our associates more technology at their fingertips not only making them more efficient, but also more effective by allowing them to bring the most value…

Thank you, Rustom. As we look ahead to 2017, I want to briefly pull back and offer some perspective on our performance against the company's strategic plan. We have several priorities, and I'm encouraged by the progress on each of them. First, we continued to outgrow the markets we serve and hence gained market share from the local and regional distributors that make up roughly 70% of the industrial distribution marketplace. Second, we're advancing our leadership position in our core market metalworking and are cultivating a second one in the Class C consumable VMI market through CCSG. Third, we're leaning out our company's cost structure. We're doing so by aggressively partnering with our suppliers to reduce purchase costs and by mobilizing a bottom-up grassroots effort to attack operating expenses. Both of these initiatives are translating into results; the former in the form of stable gross margins in the midst of a historically bad pricing environment, and the latter in the form of operating cost takeout. Fourth, we've assembled and fortified a very strong industry-leading team across our organization, one that is building upon our heritage and making our culture even better. As you know, our performance-based compensation this past year reflected the impact of the ongoing very difficult environment on our results as it should. At the same time, it's not reflected the intent and ongoing efforts of the entire team to deliver above-industry growth rates and reshape our business at the same time. As a result, and as Rustom mentioned earlier, we're targeting fiscal 2017 performance-based bonus compensation payouts at 100% of target. Fifth, we're increasing the value we bring to our customers. Our inventory management solutions are reducing inventory levels and increasing customer control. Our technical experts are working on customers' plant floors to engineer production cost savings.…

Thank you, sir. We will now begin the question-and-answer session. And our first question comes from Matt Duncan from Stephens, Inc. Please go ahead.

Hey. Good morning, guys. Nice job in a tough environment here.

Thanks, Matt.

Hey, thank you, Matt. How are you?

Good, Erik. Thanks. So I want to start with the operating margin framework. Just curious which quadrant do you think we are in right now? Are we in the middle of all four of them? Just where should we be thinking based on the current environment that you would come in for the year?

Yeah, so, Matt, hi, it's Rustom. Hi, there. I'll start on that or take that. So we're clearly in the slightly negative on the sales, right, because we're guiding 3.5% and the sales quadrants zero to 4%.

Yeah.

From a pricing perspective, while we were minus 1% or so, as Erik said, in the more recent period, we're kind of pretty much close to that midline, if you would, and that's what we think in the first quarter. So close to the middle of those two quadrants over there in Q1. But remember – and then for the whole year, going on the second part of your question, remember that our framework is for the whole year. That's why we have those seasonal swings. For example, in Q2 we have payroll tax resets for the new calendar year and stuff like that.

Sure.

So it's hard to complete – in fact it's hard to really take a line from Q1 to the entire year. Does that answer it, anything else?

I guess what I'm getting at is just if the environment doesn't change, which quadrant in this table should we think you're going to be in?

Yeah, Matt, it's Erik. So I think Rustom pretty much summarized it. The one thing I would add is, the reason we came out with this framework two years back was the reality that we're in such a short-cycle business, visibility is so limited that for us to go out and project the year in terms of environment on either demand or pricing, to be honest with you, we'd be kidding ourselves. And so what we like to do is let you – and you guys are smarter than we are in terms of figuring out what will happen in the world – to based on your assumption about what happens in the world, here's how the business performs. I think Rustom's comments are right on. Look, just to offer you one perspective, if you took at our current average daily sales levels and said if you wanted to believe nothing changed and average daily sales held through the year allowing for the holiday effects and such, that would put us somewhere minus 1%, minus 2% top line on an average daily sales basis, right, so moving closer towards the center. As Rustom said, if you asked us right now on pricing, somewhere between those. So it's a bit gray given the environment, but hopefully that gives you some perspective.

It does, Erik. Thank you. And another thing I wanted to ask about the operating margin framework, if I remember two or three years ago, you told us at $3.5 billion in revenue, you would have a high-teens operating margin. I'm curious if anything has changed in the environment or with the business that would change that, or is that still applicable assuming at some point the industrial economy has to grow again?

Yeah, Matt, so boy, that sounds like a nice number. And so essentially what you're looking at there is $700 million in growth. And what we've talked about is, as we look at the next tranche of growth for the company, what we talked about is that the op margin, the incremental margins at that next tranche of growth should certainly be in the 20%s over an extended period of time. And where that falls in the 20%s is going to be a function of couple things: number one, how fast the recovery would be. The faster the recovery, the more it moves up; and number two would be what happens with pricing. So if it's a demand environment recovery with any modest amount of pricing, we're going to inch up in that range, because we'll get some margin expansion in an early-stage inflation cycle. So it really does depend. One other thing that I'd add in would be, look, for the near term, that incremental margin perspective in the 20%s would be over an extended period of time. I think for the early rebound, we would probably see it a bit higher, meaning the first bit of growth. Rustom ...

Yeah, so let me try make it concrete. Let's say we were at zero on flat revenues and, Matt, we had $100 million of additional revenue, when you take into account the average margins and then our variable costs, freight, bonus, commissions, all that sort of stuff, right, you take the packing and shipping, take that out, and then even allowing for a little bit of additional investment in the business, we should be able to fund that $100 million migrate – from that first $100 million, take $30 million down to bottom line.

Okay.

And that doesn't mean that we'd continue doing that because I think that's important also to reinforce credit and reestablish credibility on our leverage, right. And let's say the $100 million after that, the next $100 million or we probably invest a bit more, so you couldn't model out into infinity at 30%.

Okay. And then last thing just real quickly the quarterly interest expense and share count that we should be using post the share buyback, just want to make sure we know what you guys are assuming in this $0.90 to $0.94 guidance range.

So at this current leverage that we are, interest costs would be less than $3 million in Q1 is my assumption.

And then share count somewhere around 56.5 million shares, is that right?

Yes, it is, 56.6 million shares, I think.

Thank you, guys. Appreciate it.

Thanks, Matt.

And our next question comes from Hamzah Mazari from Macquarie. Please go ahead.

Hi. This is Kayvan. I'm stepping in for Hamzah. I had a question about your balance sheet and capital allocation in relation to your M&A strategy. Can you guys just give us any color on that, what you guys are thinking right now?

Sure. Look, at 1.3 times leverage and dropping, we still have plenty of financial capacity, right, if the right opportunities present themselves, and we'll be selective. There's no change in our M&A outlook. We remain quite active in building our funnel. We're looking for opportunities, but the bar is high and the opportunities must be the right fit strategically, culturally, and financially.

All right. Appreciate that. Thanks.

Thank you.

Sure.

And our next question comes from Ryan Merkel from William Blair. Please go ahead. Ryan J. Merkel - William Blair & Co. LLC: Thanks.

Hey, Ryan. Ryan J. Merkel - William Blair & Co. LLC: So first question I want to start with the environment. At the midpoint of the sales guidance, I think November average daily sales will be down about 3.5%, which is a little worse than October, down 2.4%. So my question is should we be reading that the environment is getting a little worse or would you say nothing has really changed and you took the average of September and October and just extrapolated it.

The latter, Ryan... Ryan J. Merkel - William Blair & Co. LLC: The latter...

The punch line is the latter. Look, the reality is – and I'll just discuss it – look, we tend to not make too much of any one month's movement. So if you look back over the last few months, you'd say, oh August looks like things are getting better, September ticked down, October back up, and the reality is it's moving around. We don't see, at this moment, material changes than what we did for November was took the average of the two. Ryan J. Merkel - William Blair & Co. LLC: I figured. I just wanted to be clear. Okay. Then the second question, on the full-year guidance, the midpoint is roughly 0% average daily sales growth. But am I right that you're assuming the market is down what, two points to three points to four points, and that you're taking two points to three points of share to get there? Is that how we should be thinking about it?

Ryan, so what I'd say, we really haven't made much of an assumption. So we painted the scenario that I guess what you're talking about is somewhere in the middle there would be zero. That would be correct. Yeah, the way we look at it is if we're at zero, I can only tell you based on what we see today and what we've seen over the past several quarters. When we benchmark the MSC level of growth against some of the indices, particularly the indices that will reflect what's going on in metalworking and then when we benchmark that against what we're seeing from competitor growth rates, particularly closest to the markets we serve in metalworking, we're seeing a spread of a few hundred basis points. And so our assumption is that not much changes with respect to share gains when we project out. So the answer is yes, that at flat growth, we would anticipate the metalworking market to be down, a few points would translate into roughly a flat growth for MSC. Ryan J. Merkel - William Blair & Co. LLC: Got it. Okay. So if the market were to grow slightly next year, you would be growing 4% or 5%, 6%?

Yeah, Ryan, that's right. So the answer is yes, we would. If you make the assumption that the market stabilizes, and we pointed to the MBI sentiment reading as ticking up for two months at 48 points. That's negative but starting to approach neutral. Based on our historical model, there's roughly a four-month lag on the average. If that gets close to neutral for a period of time and implies a leveling in the market, you're exactly right. We would expect our growth rate to be plus a few hundred basis points. And, look, at that point, you'd be on the outer edge of the margin framework, maybe even beyond it. And obviously that's where when I was referencing in my comments, the leverage story that's getting built up here is really exciting. Because what we see happening right now is a lot of the share gains that we're getting are in customers that are way down, so we're capturing the spend but there's not much spend at the time. Should things level and the spend come back, we really see the potential for a big story here. Ryan J. Merkel - William Blair & Co. LLC: And that's really what I'm getting at and trying to clarify. You mentioned in the press release a tremendous leverage. So let's put some numbers on that. If you were to get up to 5%, 6% sales, I know the MBI would have to go up above 50 points and stay there because of the lag, but could you do high 20%s, low 30%s incremental margin? I think that's what you're saying.

Yeah, the answer is yeah. What I can certainly tell you is that – I'll look to Rustom but we would be at 4% or 5% top line well into the double digits on earnings growth.

Yeah, in fact, Ryan, the same point, I mean the $100 million I was alluding to earlier is kind of like a 3% sort of revenue growth number in absolute dollars, and yeah, that would be very nice migration at the very start. And then hopefully as growth continues, then you'd start to invest more. You don't just have everything flow through to the bottom line, because we have been tight on our costs. As we go forward, there would be some investments going after establishing firmly the credibility of our leverage story. Ryan J. Merkel - William Blair & Co. LLC: Got it. Okay. Thank you. I'll pass it on.

Thanks, Ryan.

And our next question comes from David Manthey from Baird. Please go ahead. David J. Manthey - Robert W. Baird & Co., Inc. (Broker): Hi, guys. Good morning.

Hi, Dave.

Hi, Dave. David J. Manthey - Robert W. Baird & Co., Inc. (Broker): So within your margin framework, you widened the price access. Last year it was flat to up. This year it's slightly negative to slightly positive. First question just is there any information content there? And then second, even if you look at that slightly positive pricing grow with sales ranging from slightly negative to slightly positive, those quadrants are consistent with last year. You reduced that range I think by 40 basis points to 60 basis points, which is just a little bit more than that 40 basis points you were talking about in the compensation accruals. That's in light of the fact that you've got gross margins up about 10 basis points at the midpoint. So I'm just wondering there is the delta because of negative expense leverage only or is there something else happening

Hey, David. It's Rustom. The delta is mostly because of the negative expense leverage. If you basically compare those midpoints year on year, and apart from the slight tweaking, if you would, on the price ranges, right, basically what you're seeing is about 40 basis points coming out of them is fundamentally from the higher incentive compensation envisaged. David J. Manthey - Robert W. Baird & Co., Inc. (Broker): Okay.

David, if you're trying to get at what's under the covers gross margin, so to give you our outlook on gross margin, so I'm not sure the 10 basis points over prior year is not what we would – look at our guide. We're actually 10 basis points under for Q1. And so basically we're starting the year at 45.0 basis points which would be flat with prior year, and you know our business long enough to know that absent any pricing move whatsoever, through the course of the year there would be a deterioration from Q1. This year given all the purchase cost actions, we'd expect that deterioration to be mild, in line with what we saw last year. But then certainly to the extent there were any mid-year pricing actions, and we'll have a better feel for that, by the way, most likely next quarter, we should have a better feel on what manufacturers are doing around the calendar year. That could push margins up, gross margins. So hopefully that helps give you a little color. David J. Manthey - Robert W. Baird & Co., Inc. (Broker): Yeah, it does. I guess I misread that. So, yeah, that gross margin guidance that you gave was relative to the first quarter. And along those lines, you started talking about the gross margin countermeasures almost two years ago now, and as those efforts have played out and as you said, Erik, if pricing is negligible and volumes are flattish with this negative mix continuing, I guess, as you said, we could almost expect some slight degradation there this year?

Yeah, yeah, David, I would say slight degradation. There were no further pricing at all. I would say similar to the picture in 2016 is sort of would be our outlook in 2017, which I would term as pretty mild degradation. In terms of the countermeasures, yeah, we've talked about them for a while and it's remarkably simple when we talked about what they are, which is just smarter buying and smarter selling. It sounds simple and it's just a lot of continued ongoing execution. And I wouldn't make the assumption that they're done. So certainly part of what's going to happen in 2017 is we're going to enjoy the benefits, particularly on the buying side of the actions taken in 2016, but there's also further actions that will occur. We're continuing to work with suppliers that want to invest in us. They're going to see an investment in return, and we're continuing to look at refining pricing activities, discounting activities in discipline. So it's kind of remarkably simple basic stuff and just a whole lot of continued execution. David J. Manthey - Robert W. Baird & Co., Inc. (Broker): Okay. Thanks, guys.

Yeah.

And our next question comes from Adam Uhlman from Cleveland Research. Please go ahead.

Hi, guys. Good morning.

Hey, Adam.

To start with a clarification, I think you had mentioned that metalworking mix was the gross margin headwind. Is there any way to dimension for this past year how big that was or would the gross margin have been up excluding that mix headwind over the past year?

I think the mix headwinds we're talking about, it wasn't specific to metalworking. It's more national accounts, more of government sales proportionately, right. I mean, I think that's what we are talking about more, the customer mix.

Okay. Got you. And then over the past year, the company's been adding a lot of new SKUs. Any sense of the incremental sales benefit that you might have gotten this past year, what you might get in fiscal 2017? And then can you talk about what you're planning on adding over the next year and how I should think about inventory levels associated with that?

Yeah, Adam, sure. So this has been a good program for us. It's been a few years now of continued SKU additions, and what I would say is you're pretty much seeing now what tends to happen is there's sort of a cumulative benefit that we get whereby we're still getting benefit from classes of SKUs that were two, three years ago that were added to our mix as there's a compounding effect. You're pretty much – I would say at this point for the most part, other than a really exciting new supplier addition or something, you are more or less seeing in our numbers now, the benefit of the program. And what I would say is at this point you can expect that to continue. And I would say the same thing from the inventory side, Adam. So you're seeing on our inventory numbers now the impact of this program, and so I wouldn't think necessarily about a tremendous change in pattern either way on revenues or inventory because this is now in the mix.

And Adam, just the quarter, not the whole year, but, I mean, inventory is probably going to be up about $10 million or so in Q1. I mean, just as we look at how far they went in Q4 and what may come through within what we see. So you actually see a slight uptick just in the quarter. It doesn't fully answer your question, but it gives you some color.

Okay. Got you. Thank you.

Welcome.

And our next question comes from Sam Darkatsh from Raymond James. Please go ahead. Sam J. Darkatsh - Raymond James & Associates, Inc.: Good morning, Erik. Rustom, how are you?

Hey, Sam.

Good Sam, how are you? Sam J. Darkatsh - Raymond James & Associates, Inc.: First, I've got a few quick questions, and one of them is a follow up on the last point. So with respect to your inventories all in, if sales are flat this year, do you expect inventories to continue to be a source of cash?

No. If sales are flat, probably a slight source of cash, but not much. I mean, if sales are completely flat, we'd probably run at around this 3.2 level. And, Sam, the reason for that is we actually see our strong balance sheet and our strong cash basically as being a competitive tailwind. I mean so we'd rather hold plenty of inventory and be able to make those extra sales. Sam J. Darkatsh - Raymond James & Associates, Inc.: Got you. Okay. Next couple of questions, Erik, I'm going to try and word delicately because I respect that there's some sensitivities around it. First with respect to the variable comp payout, the assumption that there's going to be a full payout in fiscal 2017, if we end up being at the lower left quadrant, does that still assume that there's going to be a full payout, and is that a realistic assumption?

So, Sam, to answer your specific question, the framework contemplates a full payout. What you're seeing in the framework has a full bonus in all scenarios there. Your second question is that, is that realistic? So on your second question, let me step back for a second. I want to give you a little context here and then I will answer you: What we have been looking at really for the past couple of years is the business has been operating in a very, very difficult environment. And in the midst of a difficult environment producing solid results and solid execution, and that's – looking at the whole picture here on share gains, holding margin, stabilizing gross margins, holding operating margins, the job that's been done on cash, the job that's been done on execution and strategic programs, the job that's been done on customer service. Rustom noted inventory, so inventory is way down year-over-year with service levels at all-time highs and a competitive weapon. So I look across the board, and in spite of a difficult environment for the last couple of years, I see strong execution from the company. And then I look at bonus payouts, and they have not been reflective of the team's performance in this environment. And, look, the reality is we have – I mentioned it in the remarks I feel like we have a really topnotch team, and I want to make sure that that topnotch team is rewarded, incented to continue with this good work. And so that's the reason for the assertion that we're making on the bonus. And the incentive comp at the 100% payout. To your specific question is, okay, so we've modeled it in at 100%, is that going to happen at all scenarios? I would say at this point, early to tell, and early to tell only because to some extent it will be based on the environment. And the performance will be relative to the environment in which we operate. So what I would say is if we were in that lower left quadrant, it certainly wouldn't be a guarantee that we would be at 100% of target, but there would also be a chance if based on the measures we have put in place for our plan, our performance is strong relative to that environment. Sam J. Darkatsh - Raymond James & Associates, Inc.: Final question, if I could. And to the extent you feel comfortable answering this of course, Erik. After the sale of the Atlanta DC and after the Dutch auction, is the family done at least for the time being in terms of raising cash?

Yeah, so, Sam, let me start by saying this: look, I think that the – take both of those. Both of those were done really – and I can let Rustom talk about the process we followed, but as company decisions. So if we take Atlanta, the decision on Atlanta was based on what's the right decision for the company, not what's the right thing for the family. The same thing with the tender offer, if you look at the tender offer, look, the family is overall holdings in this business remained absolutely constant and consistent pre and post tender. So the stake in the business is just as high as it was. I can share a little bit that for me personally, the family as a whole remained constant. For me personally, my stake as a percentage went up post tender, so commitment in the business is extremely high, and these decisions are being made by what's the right thing for the company for all four stakeholders.

So let me just add a couple of things on the tender offer there, this might be helpful. MSC has history of returning excess cash, right. I mean, usually that's been done via a special dividend. And this time, all we did is we gave instead of a special dividend, we gave all our owners the opportunity to sell some of their shares, same cash out flow from the company's perspective, but we have the future benefit of the lower share count, 56.6 million shares that we talked about a moment ago. And as a practical matter, I mean the way we did it through a two-step Dutch auction tender, it made absolutely sure that at the end of the day, after everybody had tendered at the strike price the company just – the family just sold enough shares to remain proportionately with the same, but very importantly they got the exact same price, the tender clearing price. So hopefully that helps there too. Sam J. Darkatsh - Raymond James & Associates, Inc.: Thank you for the clarification. That's terrific to hear. Thank you both, gentlemen.

You're welcome.

And our next question comes from Ryan Cieslak from KeyBanc Capital Markets. Please go ahead.

Hi, guys. Good morning. Thanks for taking my question.

Good morning, Ryan.

Good morning.

I just wanted to go back really quick. First, Erik, on the comments about the SKU count growth, I just want to clarify, so are you expecting then to continue to expand the SKU count into fiscal 2017? I know it's been growing in the double digits. Just how do we think about that directionally?

Yeah, Ryan, so I would say overall don't expect major changes in the program. We'll continue adding SKU count. Look, it probably is not going to be at the level – we added a net 150,000 SKUs in fiscal 2016. I would not expect a number quite that big in fiscal 2017. But what I would tell you is that the revenue contribution has as much to do with what's being added, what lines, if it is, how many SKUs. So the key takeaway there is I wouldn't view it moving forward as an additional tailwind or as creating a headwind, that the program is in-flight and sort of steady as she goes. And it's in the results. But we will continue adding, yes.

Okay. And then this quarter, actually the last couple of quarters, some nice trends with your overall eCommerce sales. Just curious to know maybe what some of the one or two drivers you're seeing there and how to think about that as you go into this fiscal 2017 year?

Yeah, Ryan, I think you're right. I think you're hitting on one of the high points. The eCommerce percentage keeps growing and I think – a couple of things going on. One is particularly mscdirect.com and the way we positioned the website, which is it's pretty – don't just think kind of public transaction site, it's pretty sophisticated, and a lot of our customers, particularly in a down market, when customers are starving for cash, cost savings, streamlining operations and freeing up people to focus on higher value add stuff, our website, a lot of the work flow and the functionality that we have in the site is really resonating with our customers, because it's freeing up time, and from our standpoint, it's a really good thing. Obviously, it's efficient. But it's also pretty sticky because it's a way for us to really kind of embed ourselves with our customers. I think that's the biggest thing that you're seeing, is it's resonating with customers particularly in a tough environment.

Okay. And then just really quickly the last one from me and I'll jump off is you have a lot of good color about the environment, Erik. Just what are you hearing in the field right now today, you know, relative to maybe where we were three months ago? Is there any significant change in the way customers are talking about the environment and just their outlook and tone going into next year?

Yeah, good question, Ryan. I would say for the most part, and what you heard from our comments was more of the same. With the one added dimension, so you know, generally pretty soft, low backlogs, low order flows, some pockets of activity as we pointed to, oil and gas continues to weigh, we have not seen that pick up; heavy machinery, infrastructure continues to weigh. I think the one added thing that I would add in as we have gotten closer to November to the election is, from many of our customers, we're hearing wait-and-see and that's pretty typical in an election year. I mean, that's the one new thing I'd call out over the last quarter and it's typical that it builds as you get close to November. So, I don't make much of it either way. I don't think any of our customers have a sense of what it's going to mean for after. The only thing I think it means is that, we always say our visibility is low, it's probably even a bit lower just because of the cautious perspective that many of our customers have.

Okay. Thanks, guys. Best of luck.

Thank you, Ryan.

Our next question comes from Andrew Buscaglia from Credit Suisse. Please go ahead. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC (Broker): Hi, guys. Just one quick question. Kind of along those lines with the customers, can you talk a little bit about what your discussions are with suppliers and then how it pertains to pricing? I know you don't want to give 2017 guidance, but any sense of like how quickly that can move to the upside?

Yeah, very good question around – look, I think discussions with suppliers as it relates to the demand side, very consistent with what we described to our earlier end users. As it relates to pricing environment, the answer is yes, it can change in a hurry. And that's one of the reasons why we also go with this framework concept because what today is a pretty mild, not pretty mild, a very difficult pricing environment, tomorrow or next quarter could quickly turn into a more positive one. Certainly, I think our suppliers are seeing what we're seeing, which is many commodities are up this calendar year. So if you took a six-month view of commodities prices, most are up. And of course our suppliers take notice of that. However, on a 12-month view, it's much more of a mixed bag. So I think we are going to have a much better feel next quarter and we'll share it because typically many of our suppliers, if they're going to take pricing will do it at the turn of the calendar year effective January 1, and those discussions will generally happen a bit later in the year as we get into late November and December. And so when we talk to you next quarter, we should have a better feel as to what we see for the potential of a mid-year price move. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC (Broker): All right. That's helpful. Nothing else from me. Thanks, guys.

And our last caller or question will be coming from Justin Bergner from Gabelli & Co. Please go ahead. Justin Laurence Bergner - Gabelli & Company: Good morning, and thanks for fitting me in.

Hi, Justin.

Hi, Justin. Justin Laurence Bergner - Gabelli & Company: Hi. You mentioned in your opening remarks that government sales decelerated a bit from – the third quarter national decelerated a bit, CCSG seemed to be flat or decelerated a bit. So what actually improved in your sales mix in the fourth quarter versus the third quarter on average daily sales basis to hold that number flat?

Justin, so if you look on an average – so our fourth quarter average daily sales were minus 3.6%, so what we were describing was relative to that company average, how did the various customer types perform. So what we said was government grew a bit in the single-digits, low single-digits, and that was in a pretty difficult environment, and we feel like that was the result of some specific wins. What we said was that CCSG relative to the company average was better. It was down but it was better than the company average. And that's been an improving trend over the past couple of quarters. That business has moved from being at or below company average and it's starting to tick up. What we also said, and I think this is probably the most relevant has it relates to a mix question that Rustom was talking to earlier on gross margin, is the core customers, which historically have been high gross margin customers for us, have been below company average and you can imagine that's directly tied to the acute softness that we've seen in metalworking. Justin Laurence Bergner - Gabelli & Company: Okay. Great. That's helpful. I think I misheard the CCSG comment. So that's good clarification. In regards to your share gains, you seem to have a more confident tone towards your share gains this quarter than you had in prior quarter calls. Is it because you think the share gains are larger or you've just gotten more confidence on sort of your estimate versus fairly opaque markets in terms of estimating share gains? Or how would you sort of describe your level of confidence in share gains versus prior quarters?

Justin, so I would say as it relates to share gains, our assessment this quarter has not changed much if at all from the last couple of quarters. We continue to see a steady solid performance in terms of outpacing the markets we serve. And I would say relative to, if we look to Q4 to prior quarters in the fiscal year, not much change. I think if you're hearing – look, if you're hearing a more positive tone, it would be forward looking. We really like the story that's building here despite the very difficult challenging environment. We like the story that's building here, and as things eventually turn, we think the business is really loaded for a nice earnings leverage story. Justin Laurence Bergner - Gabelli & Company: Okay. Great. Thanks, guys.

And this concludes our question-and-answer session. I'd now like to turn the conference back over to management for any closing remarks.

Thank you, everyone, for joining us today. We will be participating in several equity conferences in the coming weeks in both New York and Chicago, and we certainly hope to see you there. Our next earnings date is set for January 11, 2017. And we'll look forward to speaking with you over the coming months. Thank you again.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect the lines.