Good morning, and welcome to the WESCO Second Quarter 2020 Earnings Conference Call. All participants will be in 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 Brian Begg, Treasurer. Please go ahead.

Thank you, Kate. Good morning, ladies and gentlemen. Thank you for joining us. Joining me on today's call are; John Engel, Chairman, President and CEO; and Dave Schulz, Executive Vice President and Chief Financial Officer. This conference call includes forward-looking statements and therefore, actual results may differ materially from expectations. Please see the webcast slides for additional risk factors and disclosures. For additional information on WESCO International, please refer to the company's SEC filings, including the risk factors described therein. The following presentation includes a discussion of certain non-GAAP financial measures. Information required by Regulation G of the Exchange Act with respect to such non-GAAP financial measures can be obtained via WESCO's website at wesco.com. Means to access this conference call via webcast was disclosed in the press release and was posted on our corporate website. Replays of this conference call will be will be archived and available for the next seven days. With that, I'll turn the call over to John Engel.

Thank you, Brian. Well, good morning, everyone, and thanks for joining us for today's call. On behalf of WESCO, I hope that all of you have been staying healthy and safe in these challenging times. We've prepared a very thorough update for you today. I'll lead off with a few introductory remarks and then Dave will take you through our second quarter results. And then, we'll provide a review of the excellent progress we're making on the Anixter integration, as well as the outstanding value creation that our transformational combination of WESCO and Anixter will create. So, first, for an update on our business in the second quarter, results exceeded our expectations across the board. That is for sales, operating margin, operating profit, EPS and free cash flow. Business momentum improved through the quarter as we outperformed the market and built an all-time record backlog for the legacy WESCO business. Importantly, sales improved sequentially each month and we saw continued growth in our Utility business. Anixter also delivered a strong performance to close out the second quarter. Our positive momentum has continued into the third quarter. We're very encouraged by that with quarter-to-date sales through workday 28, that's quarter-to-date, down 8% versus prior year, but up 11% sequentially, with a book-to-bill ratio above 1.0. As we have done in prior economic cycles, we aggressively managed our business and took significant cost reduction and cash management actions, which enabled us to achieve a decremental margin of only 10% and generate exceptionally strong free cash flow of $140 million or 250% of adjusted net income. As you know, we increased debt to complete the Anixter combination. We expect our consistently strong and countercyclical free cash flow generation to enable us to rapidly delever and get back within our financial target leverage levels…

Thank you, John, and good morning, everyone. I'll start with an overview of results, beginning on page 4. This slide presents our second quarter, walking you from our reported GAAP results to the legacy WESCO results. The column on the left shows our reported GAAP numbers and to the right of that column are the various adjustments to our reported results to remove the transaction-related impacts. The third column subtracts the merger-related adjustments from the reported results to show the underlying results of the business adjusted for all deal-related costs and activities. To the right of that are the Anixter and WESCO components of these adjusted results, respectively. Reported sales in the quarter were down 3% and down 12% organically, driven by lower demand due to the COVID-19 pandemic. I'll walk you through our sales results in more detail in a moment. The legacy WESCO business generated approximate – operating profit of $70 million, approximately $28 million lower than the prior year on a sales decline of approximately $285 million, representing a decremental margin of 10%. SG&A was down $33 million compared to the prior year quarter, reflecting COVID-related cost actions and lower volume. Legacy WESCO adjusted operating margin was 3.8% for the quarter and adjusted EPS was $1.04. The legacy adjusted Anixter results for the period following the merger had gross margin of 20.3% and operating margin of 8.3%. This exceptional result was driven by the strong Anixter sales during the nine-day ownership period in the second quarter, continued gross margin expansion and cost reduction actions initiated by Anixter in response to COVID-19. On an adjusted basis, the combined WESCO and Anixter business generated operating margin of 4.2% and diluted EPS of $1.36. A brief comment on the merger related adjustments. The $73 million of SG&A primarily represents investment…

Thank you, Dave. So I'd now like to reemphasize the outstanding value creation that our transformational combination of WESCO and Anixter will create. There are seven key highlights regarding this industry shaping merger. Number one, the merger is a transformational combination that create, as I said before, the industry leader in electrical, communications and utility distribution and supply chain services. Number two, the combined company benefits from a step change in scale and capabilities in what remains a highly fragmented electrical and communications distribution space. On a combined, we're the industry leader in North America with approximately $17 billion in sales revenues and over $1 billion in adjusted EBITDA on a pro forma basis, including the identified cost synergies. Number three, the two businesses are highly complementary in terms of products, industries and geographies, which enables us to sell more products to more customers in more locations around the world, and more importantly, accelerate our sales growth by more than 100 basis points versus standalone projections. I've said this before, this is an extraordinary combination of two successful companies where one plus one is equal to three. Number four, we're executing an integration plan to deliver well over $200 million worth of cost synergies. As I mentioned previously, we're off to an excellent start, only six weeks since closing this acquisition in late June. And Dave will take you through our notable progress in much more detail shortly. Number five, the financial benefits of this combination that will be generated will be exceptional. We expect our EPS growth rate to double and adjusted EBITDA margins to expand by more than 100 basis points through the cost synergies I just discussed. Number six, both companies benefit from a highly resilient business model to generate substantial free cash flow through all phases of the economic cycle. The combined company is expected to generate free cash flow of more than $600 million annually by year three, which we expect will enable rapid deleveraging, so within our target range within 36 months, as well as provide future capital deployment options to drive value creation. And finally, number seven, the collective WESCO and Anixter management teams are results oriented and laser-focused on driving an efficient integration and on generating these synergies to drive the substantial value creation. In summary, with Anixter, the new WESCO will capitalize on the accelerating secular trends of electrification, increased bandwidth demand driven by higher voice, data, video and mobile usage, and the digitization of our B2B value chain. We are more bullish than ever the substantial value creation that this transformational combination will create for our customers, our supplier partners, our employees, our investors and the communities in which we operate. With that, I will now hand it back to Dave to provide additional details on the excellent progress we're making on the Anixter integration. Dave?

Moving to slide 10. The enhanced scale that this merger creates is clear. It brings together two highly complementary companies, combining them benefits our customers and creates value through significant cross-selling opportunities, premier supply chain services, acceleration of our digital initiatives and improved operational and supply chain efficiencies. On a trailing 12-month basis through June 30, the business generated revenue of approximately $17 billion and adjusted EBITDA of over $1 billion on a pro forma basis, including the $200 million of cost synergies we are confident that we will deliver. Turning to slide 11, the North American electrical distribution industry is very large and highly fragmented with an estimated total size of $114 billion per year. With the merger, the company has a share of approximately 13%. Even with this merger, the market remains highly fragmented and offers substantial opportunities for accelerated organic growth. Both WESCO and Anixter have invested in supply chain services to differentiate our overall customer value proposition. The combination of these two companies not only increases our overall scale, but also improves our ability to better serve our customers through an expanded product and services portfolio. Moving to page 12, as we consider the future of the combined enterprise, there are numerous ongoing and attractive secular trends and growth opportunities. The demand for increased bandwidth, driven by higher voice, data, video and mobile usage; greater connectivity needs for remote work, home and school applications; and the increasing electrification of our infrastructure are just a few of the growing secular trends that are directly aligned with the core capabilities of our combined business. The right-hand side of this page outlines the financial benefits of this transformational combination. We are highly confident in exceeding our three-year cost savings, sales growth and cash generation synergy targets communicated earlier this…

Thank you, Dave. Well, we've covered a lot of material this morning. So before opening the call to your questions, I'd like to just walk you through a quick summary. We responded with quick and decisive actions in response to the global COVID-19 pandemic. We will continue to aggressively manage our business, as we have done in prior economic cycles and respond to this crisis as needed. Just five months after announcing the definitive Anixter agreement in January, we completed a very successful and oversubscribed capital raise in May, and then we successfully closed the Anixter merger on June 22. Most notably, all of this was done against the COVID-19 backdrop. As I mentioned earlier, integration is off to an excellent start and execution is accelerating. We expect to exceed our cost savings, sales growth, margin expansion, and cash generation synergy targets, and deliver the substantial upside potential and value creation associated with this transformational combination. And finally, it's the start of a new era for WESCO. As an industry leader, we are now larger and more diversified with differentiated scale and capabilities in what remains a highly fragmented industry. As a result, we are exceptionally well-positioned to lead not only a digital transformation of our business but also of our industry. Overall, we are doing what we said we would do, and we will continue to transparently provide our progress versus our plan and our commitment. With that, I'd like to open the call for your questions.

We will now begin the question-and-answer session. The first question comes from Deane Dray of RBC Capital Markets. Please go ahead.

Thank you. Good morning, everyone, and congratulations.

Thank you, Deane. Good morning.

Hey. Really great to see how well you've hit the ground running on the cost synergy side and already realizing half of the first year target. What – and lots of good color on the merger rationale and the specifics and just really appreciate the color you provided today. Question I wanted to ask is, because we've hit you with this a couple of different times in the last five months, and with regard to some more specifics on Anixter's business practices, P&L and where and how are they able to generate such attractive margins. And the idea here was you were never able – you had not gotten full access to their books. Well, you have now. So, what have you learned that you didn't know before, maybe you have a higher degree of confidence that especially gives you this line of sight on margin expansion and maybe specifically gross margin? Start there, please.

Yeah. Yeah, Deane. Thanks. That's a great question. To your point, when we – we had a clean room – a clean team room process in place, all the way up till closing. So, we couldn't get to the – really the specifics on pricing, costing by customer, by supplier, what the construct of the margin was and the margin improvement programs. So, we've been working aggressively since June 22 when we closed and that's when we cross the wall, so to speak, and to get all our commercial teams engaged. And the bottom line is I'm more bullish than ever. As I've gotten a much deeper understanding now of where the strength is and how the business is run, it reinforces and reaffirms my expectations around the following. We have the global leader in communications and security, absolutely the global leader, unmatched capabilities, and the operating and business models are outstanding. And they generate very good margins from gross margins through to operating margins, through to return on total capital or invested capital, number one. Number two, the wire and cable business, absolutely a leader, undisputed leader. And as we've gotten deeper insight into that business, the power and structure of the margins, again, from gross margins, through operating margins, return on total capital, very strong. And I had a view that they were both leading businesses, but now I've got a much better sense, understanding their true profit and cash generation characteristics. And furthermore, I think this is something there where WESCO has had some deficiency historically, and I've been here for some time, as you know. We didn't have anywhere near the wire and cable strength of Anixter. They were far well-beyond us in terms of capability. So we're now in the – for the first time, in my WESCO tenure, in a unique position to sell the entire electrical package with very strong capabilities in core wire and cable, that whole category. So that's just the highest level, Deane. Maybe the only other thing I would say is we had two "industry leaders" coming together in Utility, and that speaks for itself. And I think you see the results that we posted in Q2, not only in the US, but in Canada. So I feel very good about that. I would say that's also a reaffirmation. Probably the biggest surprise of all is just – and I had a sense that we're (00:37:37) good cultural matching and that occurred. But again, post June 22, we got all the field teams engaged and the business leaders. We announced our new business leadership structure. The cultural alignment is exceptional. And I think that's what's speaking to our ability to execute and deliver results so quickly out of the gate post-close.

That's all helpful. And just given how much of the integration roadmap you provided this morning and the progress you've made so far, just – I don't feel like I need to start nitpicking on any of those assumptions. So my follow-up question might surprise you a bit and having covered WESCO for so long with multiple storm events. We have seen where and how WESCO benefits and it provides critical support during power restoration. My house in Connecticut was without power for seven days, so I felt this real-time. We did have a generator, but still. Just give us a sense...

Good to hear. I'm glad you did. That's important.

Yeah. Well, we do cover electrical equipment, so we're not supposed to...(00:38:47)

Yeah, true, true.

But I'd love to hear some real-time color as to how you coordinated as the merged company in response to all of these utilities. Did you have any supply chain issues? And where does that stand? And am I correct in assuming that's about 1% of top line benefit, if I compare that to what you did with Sandy. So that's my follow-up. Thanks.

Yeah. So I'll make a comment. Internal to the company, we have a pretty robust process. Every week, we're communicating our successes out of the integration office, a dedicated fully staffed integration office with an external consulting firm or wherever your consulting firms is, (00:39:29) as we mentioned before, communicating with all the WESCO and Anixter associates. And this was one of our top 10. And that is, what, how we coordinated the efforts and how we operationalized supporting customers when (00:39:47) through up East Coast, but particularly through the Northeast. This was more a wind-driven storm, Deane. Both WESCO and Anixter, both, had Utility customers that were in the swath of the storm, particularly in the Northeast. And we've covered that already, as I said, in the early days post close as one of our true success stories in terms of leveraging the integrated teams. We looked across those supply chain, supplier relationship, inventory positions, and we mobilized resources as if they were one company. I mean I'm absolutely thrilled with that rapid reaction and response that was executed, but now with a combined company. In terms of meaningful sales impact, this was more wind driven. It's not meaningful. It's not meaningful yet. Now, we'll see what happens down the road in terms of permanent damage and rebuild, but that's all kind of swept up into where the whole non-resi construction and resi construction market is, I think. But so far, I can tell you, we've looked at that. August – Q3/August quarter-to-date, not material at all. We're talking under $10 million of specific incremental sales associated with (00:41:12). So I think that just puts the Q3 to-date numbers in even better light, I think, in terms of the improved momentum.

That's exactly what I wanted to hear. Best of luck. Thank you.

Yeah. Thank you.

The next question is from Sam Darkatsh of Raymond James. Please go ahead. Sam Darkatsh - Raymond James & Associates, Inc.: Good morning, John. Good morning Dave. I hope you both are well.

Good morning, Sam. Hope – likewise, I hope you and your family are safe and healthy. Sam Darkatsh - Raymond James & Associates, Inc.: Thank you. A couple of questions, if I could. The first, the backlog growth, obviously, encouraging, the up 17% year-on-year, and this is a little bit more challenging for us to see, especially with the new segment reporting. Can you remind us right now, within your non-resi construction, including your backlog, what your end market vertical mix is? Specifically, where we might see some long-standing hotspots, like office and retail and hospitality and what have you? And then remind us, what the total non-resi construction is pro forma? And I've got a follow-up.

Yes. So first of all, I'll start on a WESCO basis first. The WESCO backlog is legitimate booked orders, and I say that to make a distinction of where we have a multiyear global accounts contract, utility alliance contract were (00:42:41) a large global capital construction project that result in numerous releases, packages released over time that are not yet booked. The global accounts, utility alliances, those large complex capital projects, that's not in our backlog. So this is true booked orders. And in the – what's our current are old (00:43:04) WESCO segment reporting end market segment, which we're pivoting to a new structure, as you mentioned, which I'll get to. The majority of that backlog is construction-related projects. But also if we have a direct end-user customer, and any orders that are booked – that are already booked, that are in bookings, whether it's MRO, materials or projects direct with end users, it would show up in our backlog, Sam. So it's a very good indicator, I think, overall of directionally of our project portion of our business as opposed to the MRO supplies piece or OEM. I'm really pleased with how strong it's holding up. Again, I'd like sales to be stronger because some of that is sitting in backlog. With that said, the opportunity pipeline is exceptionally strong. If you look at Anixter, they had very strong backlog that they operate with, I mean, (00:44:06) through the first half. And coming out of the second quarter, I'm really pleased, in particular, around like what will be our new Communications and Security Solutions business, which I'll talk to in a minute. That backlog is up double-digits as well year-over-year. So a little more color to help with that. We will be, as part of Q3 earnings, doing a much more detailed presentation of our new segment reporting. I'll just take a moment on that now. We have – we've announced it internally. We're operating under that structure now inside the company. The first is Electrical and Electronic Solutions. We call it EES, and we're calling these strategic business units. That's our largest business. It's global. The second will be Communication and Security Solutions, acronym CSS. That's also global, the second largest. And the third would be Utility and Broadband Solutions, also a global business, and the acronym is UBS. So that will be our segment reporting going forward. We'll do that effective with our Q3 results. And obviously, we'll have full segment reporting at that point. So I think we'll have a very much more expansive presentation at that time that walks (00:45:26) you through, here's what's in each of the three businesses, here's the end markets they serve, the business models, the operating characteristics, et cetera. If that's helpful. Sam Darkatsh - Raymond James & Associates, Inc.: And total non-resi construction pro forma as a percent of your mix?

So total non-resi pro forma, that's a really great question. It's an exceptionally important point because we have dramatically reduced our exposure to a more cyclical portion of non-resi construction. It's now roughly 24% – 24%, 25% of total company, approximately, mix. And if you go back to the original, I said, this is a new era for WESCO, right? You go back to the original WESCO spinout days that was 90-plus percent of the business. So here, we sit here today, I mean, company with $1.5 billion in sales. So here we sit here today at a $17 billion approximately (00:46:22) revenue base and 24%, 25% is non-resi. Sam Darkatsh - Raymond James & Associates, Inc.: So my final question then, after the Canadian divestiture, the small operation there, and following the close of the Anixter deal, I'm guessing there may be other businesses that you're looking at that may be deemed, I don't know, non-core or potentially distracting or potential sources of cash. What are your thoughts in terms of other planned contemplated divestitures at this point?

So we're going through a unconstrained clean sheet of paper evaluation of the strength and capabilities of all the businesses across the entire enterprise and particularly how they're lining up with our 3S (00:47:12) global strategic business units. And that's – again, this is an extensive work we're doing that really ramped up in earnest once we closed, Sam, because now we're able to cross the wall fully and get the business leaders engaged. So that's something we're looking at. And right now, I feel terrific about the portfolio in terms of – fundamentally, we've mix shifted up to a much more attractive, higher growth set of end markets that were lined up with leading value propositions to serve. So I'm thrilled with the overall mix shift up. With that said, there may be some areas of the business that are not as strategic or core that makes sense to disposition. So that's a process we're going through now. Nothing to report on that yet, but we're taking an unconstrained look across the whole portfolio on that. Sam Darkatsh - Raymond James & Associates, Inc.: So the 2 to 3.5 times of leverage prospectively in year three does not really contemplate any material divestitures and/or equity raises or anything like that? It would be entirely an organic free cash flow and EBITDA growth story?

100% correct, and we are highly confident of that. I think you can see from the cash generation in Q2 alone, I think we've set the bar on our free cash flow target three years out with a substantial upside potential against that. And so, yes, the answer to your question is, yes. So to the extent, there's any parts of the business, albeit whether they're small or whatever that don't fit that we disposition, that would just incrementally help us delever quicker. Sam Darkatsh - Raymond James & Associates, Inc.: Very helpful. Stay well.

Yeah. Thanks.

The next question is from David Manthey of Baird. Please go ahead. David John Manthey - Robert W. Baird & Co., Inc.: Good morning, everyone.

Good morning, Dave.

Good morning. David John Manthey - Robert W. Baird & Co., Inc.: Yeah. First off, thanks for the insight into how you're going to segment report this going forward. But as you roll into these new segments, will it be – like EES will be Anixter EES plus WESCO construction and industrial, and DSS is Anixter NSS plus WESCO CIG or something? Or are you just going to put everything in a blender and reshuffle and give us restated historicals?

I'm not sure I would use the blender analogy, Dave, but let me just I'll kind of give you how we're thinking about it. Again, we need to give you a very detailed presentation of this, which we will do, as part of our Q3 earnings. But it's the way I would ask you to think about it is, the core, strong, deep roots that WESCO had in Electrical. That forms the basis of EES. That's the big anchor, call it, in a positive sense, the big deep roots of EES. What gets added to that from the Anixter side is their legacy, which they are the absolutely undisputed leader, wire and cable business that will get coupled. And Dave, that was my earlier comments that that now gives us the complete strong, entire Electrical package to sell because that was a deficiency on the WESCO side. In addition, the Electrical portion of HD Supply Power Solutions that Anixter bought will become part of the EES business, which from a broad-based Electrical standpoint was predominantly in the East Coast, southeastern portion of the US. So that's EES. It will be a global business and will be the largest of the three. The second will be Communications and Security Solutions, so that'll include – it's the classic NSS business of Anixter. Bill Geary is leading that. So he was leading that previously. He's off to an absolutely outstanding start as a result of the combination. And we've taken the legacy WESCO Datacom business that was CSC and what we've invested over the years back since 2006, and that's rolling into that Anixter – in Anixter business. So we'll have all Communications and Security together. WESCO had some legacy Datacom and IP security nowhere near the size or scale of Anixter. They're…

Hi, Dave, it's Dave Schulz. So I'll start with the COVID related savings that we posted in the second quarter. Just to remind everyone that we had talked about during our April call, that we expected to deliver $50 million of run rate savings versus Q1. And this is only on the legacy WESCO business. And that $50 million will be realized in Q2 through Q4. We delivered greater than $20 million of that $50 million in the second quarter. It's primarily temporary in nature. So these were cost actions to meet the cost structure requirements due to lower demand. With the exception of the volume-related decline, we would anticipate that those costs would come back as we progress through the balance of Q4 and into next year. One of the things to keep in mind is that our salary reduction plan was only in effect until the end of the third quarter. And so we'll see a full benefit in the quarter of the monthly salary reductions, but that would be restored beginning in Q4. And just to emphasize, we did not get any synergy savings in the legacy WESCO or legacy Anixter numbers during the second quarter. We would anticipate seeing some of those savings beginning here in the third quarter and we'll call those out to you guys as we present our results. David John Manthey - Robert W. Baird & Co., Inc.: Okay. Thanks a lot for the time, guys.

Thanks, Dave.

The next question is from Nigel Coe of Wolfe Research. Please go ahead.

Thanks. Good morning, everyone. So I think I'll just crack on that -

Good morning, Nigel.

Hey. So I think I'll just crack on that question. How did the Anixter, legacy Anixter pro forma numbers look for 2Q? And I'm just curious because, obviously, the contribution – the 10-day contribution was exceptionally strong, especially at the margin line. So I'm just curious how pro forma numbers looked during 2Q.

So the legacy Anixter businesses performed relatively in line with the legacy WESCO numbers. And when you take a look at that by their segments that they previously reported, their NSS sales were down roughly 13%, EES was down 22%, and their Utility business was down just under 4%. And again, that was beyond a – on a like-for-like quarter basis that they would have reported historically. So again, relatively in line with the overall results that WESCO posted in the second quarter.

That's great information. And the 10% contribution margin within that bridge, was that – is that just the seasonality that we normally see strength at the end of 2Q or was there something else that explains that 10% margin contribution?

That's exactly right. So when you take a look at the nine days of ownership post the transaction closing, you saw a relatively higher level of sales from the legacy Anixter business on a roughly level-loaded SG&A. And so that's what drove the higher margin in that stub period for Anixter.

And then my quick follow-on is, obviously, you're very confident on the free cash flow bridge, the delevering story. Is equity off the table here? Or is there a level of a stock price where you would contemplate come back in with a treasury issue?

Well, presently, you'll recall kind of where we originally had equity as part of the – as part of financing the Anixter merger and we made the decision to go with all debt when the stock price was higher than I believe historically. And we made that decision, right, because of the strength and conviction around what the opportunity was. Here, we sit here today, it's months later, we used all debt to finance it. And I look at where our stock price is trading, honestly, currently, and I factor in – you take our three-year financial targets, which we have great confidence in not just delivering, but exceeding. And we think – and we've clearly signaled to you that we see substantial upside to the cost synergies piece alone, coupled with we've got attractive sales synergies that have started out of the gate, and they typically prove to be the most elusive. So if you just take our three-year financial targets, without even the upside, put a normal multiple on it, our stock price should be multiples higher than it is today, multiples higher. So presently where we're trading, that's well below the intrinsic value from our standpoint. (01:00:10)

Very clear. Thanks John. Thanks, David.

The next question is from Michael McGinn of Wells Fargo. Please go ahead.

Morning, everybody.

Morning.

Good morning.

Feels good to be back covering WESCO again.

Great to have you back covering us. Thank you.

Yeah. Yeah. So as we switch gears from talking about decrementals to hopefully incrementals by year-end, I know you mentioned the $75 million release in relation to the long-term free cash flow target. Can you frame what a near-term recovery looks like, specifically in terms of working capital, because you've outlined facility and fixed cost synergies and also have some supply overlap with Anixter? So does that mean working capital load-in is different versus maybe what it looked like as a standalone entity?

So, Mike, it's Dave Schulz. So typically – and you've seen this through other cycles. We have the ability to rapidly reduce our net working capital during a downturn. We then tend to see net working capital return as sales return, and it's primarily driven by the accounts receivable. So we've not provided any specific guidance on our – an outlook for 2020. So I don't want to get too far into the weeds on our net working capital plans for the year, only to remind our investors that we are laser-focused on the working capital. We do believe that there are significant working capital synergies that can be gained through the combination. We've provided a number that we've included $75 million of a net working capital release as we bring the two companies together. We've not framed up the timing on that yet.

Okay. And then more – I guess, another short-cycle question. I believe July was your toughest comp, both overall and in the US last year. So can you just frame how much of that played into the 8% figure? What you're seeing out there right now in terms of a broadening of the recovery, either by end markets, new segments, anyway, I'll take it?

Yes. So, I think – maybe, I'll just start, Michael, you'd have to look at Q2. (01:02:35) So we didn't guide, but I think versus expectations, we did better than we thought, clearly. I said across the board, starting with sales. You look at what we did in construction and look at what we did in industrial, a little better than I thought we might end up in Q2 for both end markets. Remember, construction, we're not resi driven. Very, very low percentage, single-digit percent of our construction mix is resi. So we're non-resi. So some of the resi pickup and benefit that some other distributors are getting, we won't see that on a first derivative basis. We'll see it as a benefit ultimately down the road for a non-resi cycle, which follows resi and for utility, if new leaders are going in the ground. So, actually, when you put – when you analyze our second quarter results through that lens, and if you were to mix adjust, absolutely even better than the print, Utility, we already talked about, exceptionally strong. CIG came in much better than we thought. Now, we did think that we perform disproportionately better, i.e., not down as much versus industrial and construction because of the nature of the end – kind of the drivers, the secular growth trends that are impacting those customers that we serve that are CIG. But with that said, it still came in better than we thought. We're thinking about this business in terms of – through a sequential lens because we're still down year-over-year. So, I can just tell you how we're focused on it. Everything's focused on sequential, grow sequential, grow sequential. As we do that, we'll eventually get to the point where we've gotten flat to prior year,…

Yeah, definitely. Makes sense. Thanks for the time.

Yeah.

And the last question today comes from Chris Dankert of Longbow Research. Please go ahead.

Hey morning guys

Morning.

Lot of detail – thanks so much for all the color thus far. Thinking about the reformatted segments, I guess, how are the legacy WESCO businesses and kind of the new Anixter pieces talking to each other within the new segments? I know we were talking about an SAP changeover within Anixter before. Where do we stand technology and kind of communication wise internally?

(01:07:21) . So I think, look, we're in our new structure now, and we've got our top levels of management defined. We're now building down the organization and building out the rest of the organizational layers, and that will be completed here in the third quarter. So as we exit the third quarter, we'll have the complete organizational structure, top to bottom, laid out in concert with and in an alignment with our new top level three global SBU structure. The discussion, the collaboration of teamwork is absolutely outstanding. And in terms of systems talking together, both IT teams have done some terrific work in terms of connecting the two systems. We both are essentially big data-oriented distributors. And so we've already written a series of, call it, use of a better terms, internal apps that have allowed us to look across the disparate systems and get a better sense of how we leverage the combined inventory, how we start to look at customers on a combined basis, the products that we're selling from, et cetera. So we're doing that with some quick custom apps that we've stood up already inside the company. And we're using that as a key driver of how we're measuring our cross-sell synergies. So great question because that's kind of into the details, but that's how we're working it so far, and I'm very pleased with how that's going.

Got it. Got it. Thank you so much for the color there. And I guess, really, just any further detail as far as the Canada business overall, beyond the divestiture, is that still a higher-margin business overall for WESCO here, kind of following everything that's shaking out?

Yes, absolutely, yes. And I mean, just – we've gone through this before. There are fundamental reasons. First of all, it's a terrific team, great capability, but it has inherently higher market share than the US. That was true on a legacy WESCO basis. Now, it's a whole different equation in the US and globally, now that WESCO and Anixter's combined. Take a look at our – again, our deck, and you'll see the market shares in core Electrical calls. And so we've just – we've essentially doubled the company overnight. What a tremendous opportunity in any market, but particularly the market we're in right now, that appears to be challenged because we think it just gives us – springboards us to be even more aggressive in creating more value for customers. And I've said for a long time, I thought the big will get bigger faster, and we're hearing this more than ever from our customers. They're consolidating their supply base, which speaks very well for us as an overall macro secular trend that's growing. But also, we're hearing – and I think I'm surprised I didn't get this question. We're having more and more reassuring discussions. And that's I think going to be – is exceptionally – we're exceptionally well positioned to take advantage of that with our undisputed leadership across all of North America, not just Canada, but US and Canada.

And that was I think where I really wanted to take the question, my apologies. As far as the cross-selling opportunities, and there seem to be quite a few here, I guess, is it really the international portion or is it kind of cross-segment?

No. No.

That's really a bigger opportunity?

No, no, no. There will some globally, and we've got some interesting opportunities in our – I'll use the term cross-selling pipeline that are leveraging the new Anixter global footprint. But no, this is cross segment. This is – we got a more complete portfolio, and we're going to both respective customer bases and saying, now let's sell the whole portfolio. I mean, that's – Anixter did not have safety. Anixter did not have lighting. We got a turnkey retrofit renovation and upgrade lighting capability, right? Both Broadband businesses were very different. I already talked about high complementary. So we could take every Anixter customer and bring safety and lighting to them right out of the gate and that's what we're prioritizing. And on the WESCO side, we're taking Anixter's wire and cable capability and communications and security. So there's a lot more underneath that, but that is the very highest level. It speaks to the opportunity.

Got it. Thank so much for the color, John, and best luck going forward here.

Yeah. Thank you.

This concludes the question-and-answer session. I would like to turn the conference back over to John Engel for closing remarks.

It was a very busy quarter. I think you all got a sense of that. We feel really good about how we closed it out, and we're looking forward to executing strongly here as we go through the next two quarters and close out this year and a challenging year. With all that said, thank you for your time this morning. Brian and Will are available to take your questions. And we look forward to being able to meet with you in person as our investor events eventually resume. In the meantime, please stay safe and healthy. Have a great day.